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USD / JPY recovers from weekly lows but finds resistance again around 113.80 / 85

  • USD / JPY remains far from lows, facing resistance at 113.85.
  • The rapid rally in US yields did not last, the USD weakened again.

The USD/JPY it rallied from weekly lows at 113.37 to 113.83, reaching the highest level since the start of the European session, but then quickly fell back to the 113.65 zone.

After the release of the durable goods orders report, USD / JPY bottomed at 113.37, the lowest level since October. A few minutes later, the Bank of Canada’s decision to end its QE program boosted US yields and caused USD / JPY to rally to 113.83.

During the last hour, the US yield turned down again. The US 10-year yield is back to 1.56% after a brief rally to 1.59%, down more than 3% on the day. The recovery in Treasuries keeps the USD / JPY under pressure.

On Thursday, the Bank of Japan will have its monetary policy meeting and the US economic data to be released includes third-quarter GDP.

Immediate support in USD / JPY is seen around the 113.40 area. A consolidation below would add more pressure targeting 113.20 and then 113.00 / 05. The US dollar needs to recover levels above 113.85 to ease the downward pressure. Above, the next resistance is at 114.25.

Technical levels

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