The earlier report on the $2 trillion spending got the market a little jumpy but there hasn't been any major momentum push in the market just yet. Treasuries eased as yields climbed but we are seeing some of the earlier move retrace a little to start European trading.
10-year yields jumped to 1.115% earlier but has now retreated to 1.098%.
In turn, the early jump in the dollar has mostly faded with USD/JPY easing back towards 104.00 after having hit a high of 104.20 earlier in the day.
As things stand, the key trendline resistance levels that have been in play since the latter stages of last week are still very much in play right now.
That rests in the region of 104.10-27 and serves to limit any upside momentum in the pair for the time being, as we await more clues from Powell and Biden.
Looking beyond that, there is also the 100-day moving average (red line) @ 104.64 - a key technical level that hasn't been breached since early June last year.
Putting all of that together, the risk levels for any major shove higher in the pair is quite clearly defined as per the technical levels above. A breach beyond those levels will solidify a further push in the pair - and the dollar - towards 105.00 at least and then some.
As much as one can argue that more stimulus spending can also be negative for the greenback, it is tough to argue with the charts and USD/JPY holds the key in that regard.