Technical Analysis

USD/JPY eases to fresh three-week lows but price action still largely contained

USD/JPY is down to 109.40, its lowest since 24 August

The softer readings from the US CPI data yesterday kept a drag on Treasury yields and that put some pressure on yen pairs, which is continuing to trading today.Invest in yourself. See our forex education hub.

10-year yields are holding around 1.28%, continuing its meandering mood over the past few weeks and that isn’t helping with sentiment in USD/JPY whatsoever.

The daily chart shows that price action in the pair is largely more confined to levels between 109.00 and 110.60-70 for the most part.

As such, it is tough to really get a handle on what may come next for the pair unless there is a clear catalyst either from a technical break or until the bond market makes up its mind. I’d argue the latter needs to come first but we’ll see.

If anything, the latest nudge lower in USD/JPY still doesn’t offer much unless there is a push by sellers to threaten the 109.00 handle.

But as mentioned above, for that to take place, perhaps we may need to see 10-year yields also break out of its technical range since July:

USGG10YR

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