Technical Analysis

USD/JPY eases to fresh three-week lows but price action still largely contained

USD/JPY is down to 109.40, its lowest since 24 August

The softer readings from the US CPI data yesterday kept a drag on Treasury yields and that put some pressure on yen pairs, which is continuing to trading today.Invest in yourself. See our forex education hub.

10-year yields are holding around 1.28%, continuing its meandering mood over the past few weeks and that isn’t helping with sentiment in USD/JPY whatsoever.

The daily chart shows that price action in the pair is largely more confined to levels between 109.00 and 110.60-70 for the most part.

As such, it is tough to really get a handle on what may come next for the pair unless there is a clear catalyst either from a technical break or until the bond market makes up its mind. I’d argue the latter needs to come first but we’ll see.

If anything, the latest nudge lower in USD/JPY still doesn’t offer much unless there is a push by sellers to threaten the 109.00 handle.

But as mentioned above, for that to take place, perhaps we may need to see 10-year yields also break out of its technical range since July:

USGG10YR

Articles You May Like

Signs of a swift recovery in demand. Is it the right time to buy silver?
Little Reaction to US ADP and Eurozone CPI Miss, Consolidations Continue
Yen Soars With Falling Yields, Sterling Resilient
Transitory inflation talk is back. But economists say higher prices are here to stay
GBPUSD falls below key floor/old ceiling area

Leave a Reply

Your email address will not be published. Required fields are marked *