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USDJPY – At Resistance
For the past three days USDJPY has been knocking on 111.00’s door but the level is proving to be a tough nut to crack. After a massive rally that saw the pair rally for nearly 1000 pips in a matter of weeks, some pause may be due.
The surge higher in USDJPY has been driven by the near vertical rise in US yields, buy here too the rally may be getting a bit tired. The 30-year bond has crossed the key 3% level and may be due to take a breather especially if tomorrow’s Fed minutes reveal a very cautious central bank that is only willing to hike rates once and then sit on the sidelines for another 3 to 6 months.
In the meantime, technically USDJPY faces major multi-month resistance at the 111.00-112.00 level and may need to retreat back towards 109.00 before mounting another run at the highs.