USD/JPY - H1
The pair is sensitive to the US Bond Yields movements and today's rise in the 10-Year one, fuels its recovery, along with broader cautious sentiment that seems to also benefit the US Dollar more.
As such, the reserve currency tries to return above its EMA100 (black line) and a successful effort, will open the door towards fresh weekly highs (113.67), bringing the downward trend line form October back into the spotlight (114.25-30).
In our last analysis, we had written that a daily close below 113.20 would pause the broader uptrend - something that occurred yesterday. Given this, and as long as it stays below EMA100, the pair is susceptible to fresh month lows (112.71), but a catalyst would be needed to carry the move below 112.23-40.
In any case, the next leg is unlike to be determined by technical factors, but rather by the looming US CPI Inflation at 13:30 GMT. Conventional wisdom suggests that higher than expected prints would increase rate hike expectations, boost US Bond Yields and strengthen the US Dollar.
Past Performance: Past Performance is not an indicator of future results.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.