- USD / JPY plummets for the day, despite the broad strength of the US dollar across the board.
- The decline in US Treasury yields weighed on the USD / JPY pair, benefiting the Japanese yen.
The USD/JPY it fell during the American session, losing 0.21%, trading at 113.76 at the time of writing. As shown by the US stock indices that rise between 0.01% and 1.30%, market sentiment is optimistic, with the exception of the Dow Jones Industrial which loses 0.35%. In the currency market, risk-off sentiment prevails as safe-haven pairs appreciate, which favors the Japanese yen against the dollar.
Meanwhile, the US dollar index, a basket of six currencies, is up nearly 0.5% to 94.32. In contrast, the 10-year US Treasury yield falls six basis points, standing at .519%, a tailwind for USD / JPY, due to its high correlation.
USD / JPY Price: Technical Analysis
4 hour chart
USD / JPY is consolidating within the 113.50-114.50 range. Additionally, the 50 and 100 Simple Moving Averages (SMAs) hover around 114.00, acting as a tailwind for price action in recent days. It is worth noting that 113.50 is a level respected by USD / JPY traders, in which the pair bounced towards the top of the range. However, the almost horizontal slope of the moving averages does not provide sufficient clues for the direction of the trend.
For the USD bulls to resume the uptrend, they must regain the 114.00 level. The next resistance on the way north would be the descending trend line that travels from the October 20 high to the November 1 high, around 114.30. A breach of the latter would expose the 2021 high at 114.70.
On the other hand, a break below 113.50 could open the way for further losses. The first demand zone would be 113.00, followed by the September 30 high at 112.00.
Technical levels
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