Forex technical analysis: USDJPY tests March 2016 highs again. 10 year at new high yield for the day

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    114.44-54 were the highs from March. Moving above those levels now

    The USDJPY is moving above the March 2016 highs at the 114.44-54 area again.  Yesterday the pair peaked against the area. Today in the Asia-Pacific session, the price moved above the level on it's way to a test of the mid-February  high at 114.86. The high price stalled at 114.82. That remains the high price for the day.  

    Earlier in the NY session the price moved above the 114.44-54 level again as 10 year bond yields ticked to it's high level at 2.466%.  That 10 year yield is now trading at a new high water mark at 2.48% . That seems to be helping to drag the USDJPY higher.

    One concern for traders is that with new high yields we are now seeing, are NOT corresponding with new highs in the USDJPY.  

    • The high in the Asian Paciific session was the high for the day at 114.82. The 10 year was around 2.38% at that time
    • The high in the earlier NY session was at 114.71 (lower than the 114.82 Asian high) but the 10 year yield was trading much higher at 2.466%.  
    • Now the USDJPY is trading at 114.58 currently and the yield is even higher at 2.48%.  

    Are the USDJPY longs getting tired?  Does the pair have more sellers against the resistance area - despite the rise in interest rates?  That may be the case.  So be on the lookout for a failure if the price does not get started more to the upside sooner rather than later.  Also be aware that a dip in the 10 year yield may stall the pair as well. The 10 year has resistance at 2.50% which was the swing highs from June 2015.  That is a key level for the 10 year note. 

    The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

    This article appears in: Investing , Forex

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