- USD/JPY cannot break above 115.50/55 and loses strength.
- The dollar with mixed results in the market on Tuesday.
The USD/JPY trimmed gains during the European session despite rising Treasury yields. The pair had reached as high as 115.53 hours ago, a one-week high, but then reversed direction and fell towards 115.20, paring gains.
The pair maintains a bullish tone, but will continue to be limited as it cannot break above 115.50 and assert itself. If it manages to do so, the dollar could gain momentum to extend the rises, with the next resistance at 115.70. In the opposite direction, support looms at the 115.15/20 area, and below at 114.90 (Monday’s low).
The USD/JPY pullback occurred despite Treasury bond yields remaining near month to year highs. The 10-year tranche yields 1.95%, a level not seen since December 2019, and the 30-year tranche yields 2.24%, the highest since June.
The economic calendar shows Tuesday’s standout data for US foreign trade in January, which is expected to show an increase in the deficit to $82.8 billion. It is a report that does not usually have an impact on the market. The key figures for the week will come on Thursday with the Consumer Price Index for January, which may play a key role in shaping expectations on the Federal Reserve’s monetary policy and thus on the dollar.
Technical levels
Source: Fx Street
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