USD / JPY bounces strongly from monthly lows, reaches daily highs above 108.00

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  • The Japanese yen plummets across the board amid risk appetite and rising US yields.
  • USD / JPY is about to end the negative streak with a strong reversal.

The USD/JPY bottomed at 107.42 hours ago, reaching the lowest level since March 4. Since then he has gained more than 60 pips. It climbed to 108.14 in a few minutes, taking a sharp turn. At time of writing, it is hovering around 108.00, modestly higher for the day, but now, momentum is pointing to the upside.

Rising US yields triggers the USD / JPY rally. The 10-year yield tested at 1.53%, the weekly low, and then jumped to 1.579%. Economic data from the US contributed to the rebound. New home sales rose more than 20% in March and Markit’s PMI beat expectations in April according to preliminary data, reaching new all-time highs.

Another factor that weakened the yen was risk appetite. US stocks rebounded and turned positive. The Dow Jones is back above 34,000, up 0.60%, while the Nasdaq is up more than 1%.

If the USD / JPY pair can sustain at current levels, it would offer a reversal signal upon recovering 108.00 and the 55-day moving average. The dollar could post its first gains after falling for four consecutive days. Weekly it is still in negative territory, heading for the third consecutive weekly decline.

Technical levels

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