USD/JPY flirts with 1-hr 50-MA, eyes treasury yield

The decline from Monday’s early Asian session high of 110.52 appears to have run out of steam in the Asian session today, with the  pair taking support of the upward sloping 1-hour 50-MA seen at 109.62.

At the time of writing, the USD/JPY was flat lined around 109.80 levels.

10-year T-yield failed at key resistance

The 10-year treasury yield jumped to a high of 2.325% on Monday before trimming gains to hover around 2.27%. The decline from 2.325% marked the failure to hold above 2.31%, which is the resistance offered by the neckline of the double top reversal pattern on the 10-yr yield weekly chart.

The action in the treasury yield warrants caution on the part of the Yen bears.

Japan services PPI released today bettered estimate, but had little effect on the USD/JPY pair. The currency pair is likely to track the treasury yields and broader market sentiment ahead of the US consumer confidence and housing data release.

USD/JPY Technical Levels

A break above 110.09 (Apr 7 low) would open doors for 110.52 (previous day’s high). A daily close above the same would expose 111.85 (50-DMA). On the lower side, breach of hurdle at 109.33 (5-DMA) could yield a pullback to 109.06 (10-DM) and 108.81 (200-DMA).