- The US dollar jumps when the 10-year yield reaches 1.60% and the 30-year yield 1.99%.
- USD / JPY is up for the fourth day in a row, targeting 115.35 / 50.
The USD/JPY It continues to move higher, and has reached a strong resistance zone located between 115.35 and 115.50. It touched a fresh five-week high at 114.36, slightly above the previous high driven by a stronger rally across the board.
The DXY is up 0.60% so far on Monday, trading above 96.20. Stock prices are modestly higher on Wall Street. The relevant movements at the beginning of the year come from the bond market as Treasuries fall. The 30-year yield is at 1.999%, the highest in a month, while the 10-year yield rose above 1.61%. The 2-year yield is above 0.80%, the highest level since March 2020.
US economic data for Monday showed no surprises on Monday. Markit’s manufacturing PMI (final) hit 57.7 in December, down from the flash reading of 57.8. ADP’s employment report will be released on Wednesday and non-farm payrolls on Friday. “The recent rise in COVID likely came too late to avoid a strong and above consensus reading for payroll in this week’s December report,” argue analysts at TD Securities. They forecast an increase in payrolls of 500,000.
Looking at recent highs
USD / JPY peaked in November at 115.51, a multi-year high. From the current level to the mentioned high, resistance is expected to emerge. With the pair around 115.30, the positive momentum remains intact.
Conversely, a drop below 115.00 would clear the way for a correction, with support levels seen at 114.75 and 114.60.
Technical levels
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