USD/JPY hits six-week highs above 139.00 despite risk aversion

  • The dollar gains momentum despite a new decline on Wall Street.
  • Rising US yields keep the yen under pressure.
  • USD/JPY is approaching the 140.00 area again.

The USD/JPY is gaining momentum during the American session and rose to 139.08, reaching the highest level since mid-July. The pair remains bullish amid a stronger US dollar overall.

The USD rose strongly on the back of rising US yields. The 10-year yield rose to 3.14%, while the 2-year Treasury yield rose to 3.49%. Bonds fell even as US equities suffered a sharp decline. The Dow Jones falls 0.89% and the Nasdaq falls 1.25%.

US economic data showed an improvement in consumer confidence, with the CB index rising from 95.3 in July to 108.80 in August. The figures helped the US dollar.

Earlier on Tuesday, Japan released labor market data. The unemployment rate remained at 2.6%. Although market participants still see a 75 basis point rate hike by the Federal Reserve as possible, they expect the Bank of Japan to maintain its ultra-loose policy.

The divergence in monetary policy has pushed USD/JPY higher through 2022. If the pair sustains above 139.00, the next level to watch is the multi-decade high at 139.38; and then attention would turn to 140.00. On the other hand, support levels could be placed at 138.70, followed by 138.05 (daily low) and 137.65.

Technical levels

USD/JPY

Panorama
Last Price Today 138.69
Today’s Daily Change -0.04
Today’s Daily Change % -0.03
Today’s Daily Opening 138.73
Trends
20 Daily SMA 135.21
50 Daily SMA 135.84
100 Daily SMA 132.78
200 Daily SMA 124.48
levels
Previous Daily High 139
Previous Daily Minimum 137.57
Previous Maximum Weekly 137.76
Previous Weekly Minimum 135.81
Monthly Prior Maximum 139.39
Previous Monthly Minimum 132.5
Daily Fibonacci 38.2% 138.45
Daily Fibonacci 61.8% 138.11
Daily Pivot Point S1 137.86
Daily Pivot Point S2 137
Daily Pivot Point S3 136.43
Daily Pivot Point R1 139.3
Daily Pivot Point R2 139.87
Daily Pivot Point R3 140.73

Source: Fx Street

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