USD/JPY drops despite Yellen’s tone

USD/JPY hit a fresh daily high after the release of Janet Yellen speech at 107.55 but then turned to the downside and dropped more than 50 pips. Price fell bellow 107.00 and reached 106.87. It was hovering around 106.95, where the 20-hour moving average stands.

Greenback dropped sharply on Friday after the release of a disappointing NFP report. Regarding those numbers, Yellen said that “one should never attach too much significance to any single monthly report”. She sounded optimist about the future of the economy and said that gradual rate hikes will probably be appropriate.

The yen gained momentum in the market as stocks reacted to the downside, trimming gains. The Dow Jones moved off daily highs and it was up by 0.35% while the Nasdaq was up only 0.25%.

USD/JPY levels

To the downside support levels might lie at 106.50 (June 3 low), 106.30/35 (daily low) and 106.00 (psychological). On the opposite direction resistance could now be seen at 107.00, 107.55 (daily high) and 108.50 (June 02 low).