- The dollar regains ground for the second day in a row throughout the market.
- USD / JPY driven by rise in Treasury yields.
USD / JPY is rising again on Tuesday, having rallied on Monday. The pair reached as high as 109.99, the highest since Friday. In the preview of the American session, it is in the zone of the maximums supported by the rise in yields of Treasury bonds.
The return to normal activity after Monday’s US holiday came with a significant rise in Treasury yields, which on the one hand strengthens the dollar and at the same time, weakens the yen on all fronts.
The 10-year rate reached 1,366%, the highest level since August 26. It is very close to the peaks of that month. If there are more rises, the dollar could intensify the rises. The DXY advanced 0.10% on Tuesday, extending the recovery from a month-long lows.
Big Picture: Range Holds
Despite recent moves, the overall USD / JPY outlook remains one of range trading. Since mid-August the pair has moved sideways, with support around a wide area around 109.50 and resistance around 110.20.
Until I clearly leave that range behind, the USD / JPY will remain sideways. A daily close clearly above 110.20 will point to more rises, while below 109.50 will leave it weakened.
Technical levels
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