USD/JPY holds near session highs amid higher Treasury yields

Technical Analysis

Author: Justin Low | usdjpy

USD/JPY retests the early morning high as yields creep higher

USD/JPY H1 17-06
The pair is sitting around 108.70 and is challenging resistance around 108.72 once again as Treasury yields inch higher on the session. 10-year yields are up by 3 bps to 2.11% currently and that's helping to push yen pairs slightly more to the upside.

That said, risk sentiment remains a little muted in general as US equity futures and European equities are near flat levels on the day. As mentioned earlier, it's hard to really pick at the moves here as they are still within modest ranges considering that markets are settling into a bit of indecisive state ahead of the FOMC meeting this week.

For USD/JPY, near-term price action should remain contained well under the 109.00 handle with current resistance at 108.72 and last week's high at 108.80 likely to keep traders in check before committing to any risk-on rally before the Fed.

Meanwhile, downside levels are limited by the key hourly moving averages (100 and 200-hour MAs) around 108.42-45 so expect that to be a key area in keeping price action anchored over the next few sessions.

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