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  • The USD/JPY is exploring the downside  on speculation the Fed is nearing an end of the tightening cycle.  
  • The pair is being guided lower, possibly by the 10-year treasury yield, which hit five-day lows soon before press time.  

Powell’s dovish speech continues to weigh over both the US Treasury yields and the greenback.

At press time, the 10-year treasury yield is trading at a five-day low of 3.03 percent, having shed four basis points yesterday. More importantly, the decline in the treasury yields is likely pushing the USD/JPY pair lower.

The currency pair dipped below the 100-hour moving average (HMA) of 113.41 a few minutes before press time and could slide further, as the double top breakdown seen in the 10-year treasury yield’s daily chart is signaling the path of least resistance is to the downside.

Fed Chair Jerome Powell, at 17:00 GMT yesterday, said the interest rates are just below the range of neutral estimates, squashing bets of an extended tightening cycle. As a result, the dollar will likely remain on the defensive. The downside in the USD/JPY, however, could be limited as increased prospects of fewer Fed rate hikes could put a strong bid under the global equity markets.

USD/JPY Technical Levels

USD/JPY

Overview:
       Today Last Price:  113.38
       Today Daily change:  -25  pips
       Today Daily change %:  -0.220%
       Today Daily Open:  113.63
Trends:
       Previous Daily SMA20:  113.33
       Previous Daily SMA50:  113.03
       Previous Daily SMA100:  112.21
       Previous Daily SMA200:  110.37
Levels:
       Previous Daily High:  114.04
       Previous Daily Low:  113.44
       Previous Weekly High:  113.24
       Previous Weekly Low:  112.3
       Previous Monthly High:  114.56
       Previous Monthly Low:  111.38
       Previous Daily Fibonacci 38.2%:  113.67
       Previous Daily Fibonacci 61.8%:  113.81
       Previous Daily Pivot Point S1:  113.37
       Previous Daily Pivot Point S2:  113.1
       Previous Daily Pivot Point S3:  112.77
       Previous Daily Pivot Point R1:  113.97
       Previous Daily Pivot Point R2:  114.3
       Previous Daily Pivot Point R3:  114.57