November 29, 2022

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USD/JPY holds above 109.00 but remains vulnerable, poses risk for the dollar

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USD/JPY fends off a push below 109.00 for the time being

USD/JPY D1 04-08

The pair fell to its lowest level since late May yesterday but managed to keep a daily close just above the 109.00 handle.

Sellers have been keeping the pressure this week on a break below the 100-day moving average (red line) and we may be approaching a key crossroads going into the US non-farm payrolls report later in the week.

Right now, the pair is challenging support at 109.00 and the 61.8 retracement level @ 109.07 but a firm break below that leaves a pocket of space for price to travel towards 108.50-60 and then the May lows next @ 108.33-35.

The bond market remains a key spot to watch when viewing yen pairs and for now, Treasury yields are steadier around 1.18% after the Monday drop but they are still caught in a series of lower highs, lower lows and that poses a threat for USD/JPY buyers.

In turn, more negative sentiment in the pair could also translate to additional dollar weakness as the currency continues to struggle for the most part post-Fed.

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