USD / JPY extends reversal to 109.80 amid dollar weakness

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  • Dollar accelerates the decline against the yen and presents a general weakness.
  • USD / JPY returns to the previous range and is approaching the recent low.

The USD / JPY is trading at the lowest level in two days at 109.80, in a process of major reversal, having risen to a week high of 109.40 on Wednesday.

The main driver for the fall is a general weakness of the dollar throughout the market. The greenback is cutting with three consecutive days of rises and descends on all fronts.

A pullback in Treasury yields contributed to the negative momentum for the dollar. The 10-year rate is at 1.33%, away from the recent peak of 1.38%.

The US jobless claims report showed better than expected numbers, but this did not help the dollar. The only relevant rise in the dollar is against the euro, with the EUR / USD at 1.1815, as a result of what was left by the meeting of the European Central Bank.

Return to a family level

USD / JPY on Wednesday looked like it was ending a period of consolidation around 110.00, but it was not. The price remains in a kind of triangle without definition.

A close below 109.60 would point to more weakness ahead, while to the upside, a clearer signal appears to be needed, which may be a consolidation above 110.50. While this is not done, the outlook seems to favor more range runs.

Technical levels

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