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29 Jul 2015
USD/JPY stalls even though Treasury yields rise
FXStreet (Mumbai) - The USD/JPY pair has stalled near its session high of 123.70 even though the long duration treasury yields in the US extended gains.
Treasury yields rise ahead of the FOMC
The 10-year yield now trades 2.3 basis points higher at 2.273%, while the 30-year yield is up 2.1 basis points at 2.984%. At the short-end of the curve, the 2-year yield, which mimics short-term interest rate expectations is marginally higher at 0.70%. The relative weakness in the 2-year yield is line with the expectation that the Fed is reiterate that lift-off is data dependent.
However, the USD/JPY pair, which is known to move in line with the long-end treasury yields, has stalled around 123.70. It remains to be seen if the yields and the USD/JPY pair stay resilient ahead of the FOMC. The US pending home sales data due for release could also affect the pair.
USD/JPY Technical Levels
The immediate resistance is seen at 123.83 (July 27 high), above which gains could be extended to 124.18 (July 23 high). On the other hand, support is seen at 123.34 (50-DMA) and 123.00 (July 27 low).
Treasury yields rise ahead of the FOMC
The 10-year yield now trades 2.3 basis points higher at 2.273%, while the 30-year yield is up 2.1 basis points at 2.984%. At the short-end of the curve, the 2-year yield, which mimics short-term interest rate expectations is marginally higher at 0.70%. The relative weakness in the 2-year yield is line with the expectation that the Fed is reiterate that lift-off is data dependent.
However, the USD/JPY pair, which is known to move in line with the long-end treasury yields, has stalled around 123.70. It remains to be seen if the yields and the USD/JPY pair stay resilient ahead of the FOMC. The US pending home sales data due for release could also affect the pair.
USD/JPY Technical Levels
The immediate resistance is seen at 123.83 (July 27 high), above which gains could be extended to 124.18 (July 23 high). On the other hand, support is seen at 123.34 (50-DMA) and 123.00 (July 27 low).