USDJPY Could Rally While 10-Year US Notes Are Moving

US Bonds were trading lower in the last two sessions after the minutes of the Federal Reserve showed that most policymakers still favored a tapering program this year. But, the sell-off in bonds came on news that QE could end in mid-2014. The USD was firstly down on the news, but then it recovered during the Asian trading hours. However, EURUSD is again finding some bid, so it lacks a real direction at the moment. Meanwhile the S&P Futures are rallying.

I am looking at the 10-year US notes where I suspect that prices are moving lower into wave B that is part of a larger three wave rally on a daily chart shown below.

Wave B could reach levels around 124-124.50 so there is room for more weakness. If weakness resumes, then US yields will rally and support USDJPY.

10 -year US notes daily

On USDJPY I can see some reversal to the upside but we still need to wait more, especially if we also consider that on 4h chart the price is now testing the upper trend line of a downward channel. We definitely want to see a breakout here to confirm bullish waves, back towards the 100 handle.

USDJPY 4h

Gregor Horvat

Grega Horvat Grega is based in Slovenia and has been involved in markets since 2003. He is the owner of Ew-Forecast, but before that he was working for Capital Forex Group and TheLFB.com. His feature articles have been published on FXstreet.com, Thestreet.com, Action forex, Forex TV, Istockanalyst, ForexFactory, Fxtraders.eu, Insidefutures.com, etc. He recently won the award on FXStreet.com for Best Forex Analysis in 2016. At Ew-forecast he helps clients and educates them about the Elliott wave principle and how to label and track unfolding patterns in real time. His approach to the markets is mainly technical. He uses a lot of different methods when analyzing the markets such as candlestick patterns, MA, technical indicators etc. His specialty, however, is Elliott Wave Theory which could be very helpful especially if you know how to use it in combination with other tools/indicators. EW-Forecast To be involved in the market effectively, you need the right guidance and resources, and our team can help you to achieve that. Our team is providing advanced informations about Elliott Wave theory in real time. The Elliott Wave Principle gives you a method for identifying the behavior of the markets and at what points the market is most likely to turn. We help new traders who are interested in Elliott Wave theory to understand it correctly. We are doing our best to explain our views as simple as possible with educational goal, because knowledge itself is power!

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