200 bar MA on 4-hour and swing area between 106.62 and 106.705
The USDJPY has taken care of the resistance from the highs on August 3rd and that opened up the pair for further probing.
That move has the pair approaching the 200 bar on the 4-hour chart at 106.62. Above that is a swing area that extends up to 106.705 (see blue numbered circles). Those levels were support and resistance swing levels – and mostly a floor – going back to mid-June (see yellow area in the chart above). What was once a floor becomes a ceiling. Be aware. There could be some sellers on the first look.
Traders will eye the 106.42-46 old highs as close risk now. Stay above keeps the buyers in control.
The USDJPY is getting a boost from the rise in US yields.
The yield curve has ratched up as the Treasury looks to sell 3, 10 and 30 year issues this week.
The good news is the rates are still near historically low levels (and well above most European yields). However, investors may start to demand higher yields for the supply. The declining dollar may also be a problem as well for investors.
For today, however, the USDJPY is getting a boost from the higher yields.