- For the second day in a row the USD / JPY fails to hold above 114.00.
- Treasury yields hold firm, limiting pair downsides.
USD / JPY is falling on Friday and is on track to have its first weekly decline after seven consecutive rises. The pair failed to hold above 114.00 and cIt dropped to 113.73, marking a new low for the day.
After having reached the maximum in years about 114.70, USD / JPY lost momentum despite equity markets stabilizing and rising Treasury yields. The 10-year benchmark rate remains close to 1.70%. The IHS Markit US report for October (preliminary) will be released today.
Jerome Powell, the Fed chairman, will also speak on Friday. in possibly the last public appearance before the November 2-3 FOMC meeting. “With US data remaining firm, the Fed is poised to cut (the buying program) and markets are fully pricing in a take-off in the second quarter of 2022. Therefore, we believe that the upward movement in US interest rates and the dollar will gain strength again, “say analysts at Brown Brothers Harriman.
Technically the USD / JPY shows a bearish bias in the short term. Next support is seen at Thursday’s lows at the 113.65 zone, followed by 113.40 and 113.20. In the opposite direction, the resistance to breaking that 114.20. A weekly close above that level would point to a continuation of the upward movement, with the next resistance at 114.45 and 114.70.
Technical levels
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