USD/JPY targeting a break of 110.00 and 110.19 200-D SMA

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  • USD/JPY bulls target the 200-D SMA as Tokyo gets underway with a fresh 109.94 high scored for Asia so far.
  • USD/JPY unable to gather momentum overnight in a subdued market with plenty of risk simmering away in the background. 

USD/JPY has been picked up by the bulls in the Tokyo open, targeting a break of the exporter level of 110.00 where stops are likely lingering above (200-D SMA at 110.19) for potential risk of a spike higher if triggered. At the time of writing, USD/JPY is trading at 109.92 with a high of 109.93 and a low of 109.80. 

Funda-FX wrap: plenty of fat to chew on, setting a market precedent

The 110 exporter hedging level capped the bullish attempts after a four-day series of higher levels. Overnight, the yen collected a bid as investors remained concerned for fundamentals on the geopolitical front. The European nerves and lower US Treasury yields kept the pressure on. Overall, USD/JPY dropped from 110  in Tokyo and traded as low as 109.47 before the bulls sent the pair back to 109.76. However, the pair found a bid in early Asia to a high of 109.87 before the Tokyo open.

USD yields

As far as yields went in the US, the US 10yr Treasury yield dropped from 2.94% to 2.90% before clawing back to 2.92%. The  2yr yields dropped 2bp to 2.49%. Analysts at Westpac explained that the “Fed fund futures continued to predict a rate hike on 13 June and another by year end though yields were slightly lower on the day”.

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the pair was down for the day, while technical indicators retreated sharply from nearly overbought readings, which indicates an increased downward potential. The key support is the 38.2% retracement of its latest daily slump at 109.35, as a break below the level could result in a stepper decline towards the 108.50/60 price zone.

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