Down even though bond yields are higher today
The USDJPY took a break from the "follow the yields" story today, and instead focused on the inability to go higher. The US yields are higher today with the 5 year up 2.8 BP, the 10 year up 3.2 BPs and the 30 year up 3 BPs. The USDJPY has been following the yield lead most of the time recently. Not today. The pair is lower while yields are higher.
What is helping the downside?
As per the earlier post, the 113.00 level was a key trend line on the daily chart (see chart above). In the early NY session , the high reached 113.04, stalled, and started to come down.
Now, that move lower is ok if the support holds. However, also as per the prior post, the 200 bar MA on the 5-minute chart had held on a number of occasions today (and also into yesterday's trading too - see green circles in the chart below). If that support level held, the upside still had potential to be broken.
That 200 bar MA did not hold. The buyers turned to sellers. The price moved lower (see 5-minute chart below). You can see it in the price action against the technical levels.
What now? The next target comes in at 112.34 which is the 38.2% of the weeks trading range. The 100 hour MA and 50% of the move up this week comes in at 112.10-12 area (see hourly chart below). With the employment report tomorrow I would expect moves toward the 100 hour MA would solicit profit takers from the shorts.
On the topside, the 112.645 was a low early in the European session. It was also two separate lows in the NY session (see 5 minute chart above). A move back above that level would not be what sellers looking for more downside, would like to see.
