It's another mixed start to European morning trade, as we see a more tepid mood in equities. Meanwhile, the dollar is mildly higher but Treasury yields are actually sitting lower on the day. 10-year yields are now down 2 bps to 3.515% and that might eventually catch up to the dollar, even though it did not yesterday.
However, we are seeing a bit of divergence in that sense from USD/JPY price action as such:
Something's gotta give eventually and I tend to refer to the saying that the bond market is always right. That said, USD/JPY did push above its 200-hour moving average (blue line) after a bit of a tug of war. But it might find that break fleeting if the bond market doesn't vindicate the move in my view.
There is also some added resistance from the 23.6 Fib retracement level from the downswing since October at 137.94 for the pair.
Elsewhere, the dollar is seeing light changes with EUR/USD down 0.2% to 1.0445 and GBP/USD down 0.1% to 1.2120 at the moment. The ranges are narrow as traders and investors are still sorting out their feet in what is shaping up to be a bit of a tense period before next week's big showdown.
