- US 10-year T-bond yield loses more than 1%.
- US Dollar Index stays unchanged on the day near 96.60.
- Wall Street looks to open modestly higher.
The USD/JPY pair came under a sudden pressure in the last hour and erased all of its daily gains. As of writing, the pair was virtually unchanged on the day at 110.70.
A sharp drop witnessed in the 10-year US T-bond yield, which is now down more than 1% on a daily basis, seems to be the primary driver of the pair’s recent fall. Despite the decline in yields, the greenback continues to fluctuate in its tight daily range. Ahead of FOMC members’ speeches later in the session, the US Dollar Index is flat on the day at 96.60.
Also in the session, Atlanta Fed President Bostic said that the monetary policy direction 12-18 months out was not clear amid uncertainties surrounding global economic growth and Brexit. “The Fed has tried to pull back and not be as stimulative,” Bostic added.
Meanwhile, the S&P 500 Futures is adding 03% on the day, suggesting that major equity indexes in the U.S. could start the day in the positive territory. If Wall Street gathers bullish momentum and posts meaningful gains, the JPY could struggle to find demand.
Technical levels to consider
The pair could face the first technical support at 110.25 (Feb. 15 low) ahead of 110 (psychological level) and 109.55 (50-DMA). On the upside, resistances are located at 110.95 (Feb. 20 high), 111.25 (100-DMA) and 111.55 (200-DMA).
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