- The US dollar gains momentum during the US session.
- Dow Jones at record highs, US yields rise sharply.
He USD/JPY it is up more than 50 pips, having the best day of the month driven by higher US yields and risk appetite. The pair rebounded from the lowest levels since March near 102.50 and peaked at 103.43, a one-week high.
At time of writing, the pair is trading at 103.25 before the release of the FOMC Minutes. The key factor on Wednesday, after the elections that will decide the composition of the US Senate, are US yields. The 10-year yield reached 1.05%, the highest level since March.
Stock prices on Wall Street took a decisive turn to the upside. The Dow Jones is at all-time highs, 1.55% higher and the Nasdaq is up 0.51%. Weaker-than-expected US economic data did not affect market sentiment. The ADP report showed the first negative variation in private employment since April. Now market participants await the FOMC Minutes from their last meeting.
From a technical perspective, the USD / JPY main trend points to the downside, but the strong rebound eased the bearish pressure in the near term. A consolidation above 103.30 would keep the pair supported. A daily close above the 20-day moving average at 103.55 would weaken the bearish outlook. The key level to watch is around 104.40, a downtrend line that should change the bias to neutral if it breaks.
Technical levels
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