USD/JPY tests key trendline support as the yen leads gains today
The latest downdraft in Treasury yields is finally stirring up some nerves in the market, as European indices are marked lower at the open with US futures also falling in tandem.
This in turn is helping to see USD/JPY pushed lower to 110.11 currently, testing key trendline support on the day @ 110.15 with sellers eyeing a push towards 110.00, with the 38.2 retracement level of the latest upswing seen @ 110.06.
The confluence of support here will be key in trying to keep buyers in the game, otherwise there could be a quick drop towards the 100-day moving average (red line) next, seen currently @ 109.12.
It is all about deciphering what message the bond market is sending now and that is a tough one to figure out for market participants considering what we have heard from the Fed and how the inflation outlook is playing out.
