USD/JPY fell below the rising wedge yesterday, indicating a return from the 112.14 high sell-off. However, thecurrencyThe pair's decline did not last long, and the price rebounded strongly around 111.00, probably because US Treasury yields rose.
Although official data show that the wholesale price index rose only 1.9% in the 12 months to February this year, the smallest increase since June 2017, the US 10-year bond yields still rose by 3 basis points.
Also released this weekCPIAnd WPI data have strengthened people's expectations that the Fed will remain on the sidelines in 2019.
So far, the 10-year US Treasury yield has risen to 2.63%. The rise in yields may be related to rising risk appetite and optimism in durable goods orders, which bodes well for the dollar.
The USD/JPY 4-hour chart shows that the downward callback from the 112.14 high has ended and the pair has re-turned to bullish. The upper resistance is seen at 111.86 and the further resistance is at 112.14. But if the price falls back and falls below 111.46, the bullish outlook may be weaker.
On the downside, the USDJPY needs to fall below 111.00 to confirm the decline.
111.46 (the support level converted from the previous resistance)
111.32 (200-day moving average)
111.00 (last day low)
111.61 (112.14-110.75 Fibonacci 61.8% retracement)
111.86 (key price in the 4 hour chart)
112.14 (recent high)
(Article source: Chart home)