- 10-year US T-bond yield helps USD/JPY stay in the green.
- Greenback outperforms its major rivals for the fifth straight day.
- Wall Street starts the day flat.
After closing the first day of the week with a small 20-pip loss, the USD/JPY pair recovered its losses on Tuesday but failed to rise above the 112 mark. As of writing, the pair was trading at 111.90, adding 0.16% on a daily basis.
The US Dollar Index, which staged a decisive recovery after finding support near 95.80 last week, touched its highest level in two weeks at 96.82 on Tuesday to keep the pair’s bullish momentum intact. At the moment, the 10-year T-bond yield is up 0.75% on the day while the DXY is gaining 0.15% at 96.78. Later in the session, the IHS Markit and the ISM will release the PMI data for the service sector.
Earlier today, Boston Fed President Rosengren said that the Fed’s interest rate was at the right level for where the economy was currently and explained that the ‘inflation mute’ was the primary reason behind the Fed’s patience.
Meanwhile, following Monday’s heavy sell-off, major equity indexes in the United States started the day virtually unchanged to point to neutral market sentiment.
Technical levels to consider
The pair could face the initial support at 111.50 (200-DMA) ahead of 111 (100-DMA) and 110.35 (Feb. 27 low). On the upside, resistances align at 112 (psychological level/daily high), 112.60 (Dec. 20, 2018, high) and 113.35 (Dec. 10, 2018, high).
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