- Decline in Treasury bond yields, weakens the dollar rally.
- USD / JPY in negative for the day, the yen becomes the best performing currency.
USD / JPY reached 110.81, the highest level in two and a half months, then stopped the bullish run, then made a major correction. The pair just dropped to 110.36, marking a new low for the day.
The yen appreciated on all fronts in recent hours, becoming the best performing currency on Thursday. The pullback in Treasury yields coupled with some investor caution is playing in the Japanese currency’s favor. Data from the US on Thursday, from jobless claims and the Philly Fed, helped to constrain the dollar.
The dollar remains strong on all fronts except against the yen. Even the USD / JPY operates above the level it had before the Federal Reserve statement was released. FOMC members’ projections sent the dollar skyrocketing on Wednesday.
USD / JPY is again testing a key resistance zone between 110.80 and 112.00, which contained the rises in March and April. If this level is left behind, the dollar would be ready for an extension of the rally. But as long as it remains below, it will be vulnerable to bearish corrections.
Technical levels
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