Usdjby fell on Tuesday as narrowing the return on US Treasury bonds and Japanese government links determined the market path. The couple was traded at 149.38, a decrease of 0.2 % during the New York session, which reaches its monthly losses to 4.2 %. In addition, the US dollar decreased by 1.7 % against the yen, which doubles the downward momentum in the short term.
US President Donald Trump repeated on Tuesday that the definitions of imports from Canada and Mexico will enter into force starting next month. This gave the dollar some advantage over the yen due to its relative safe haven. Also, the definitions are expected to maintain inflation on the rise, prompting the federal reserve to maintain interest rates unchanged in the first quarter of the year.
The return on US Treasury bonds for 10 years reached 4.321 %, a decrease of 22 basis points last month. On the other hand, the Japanese return reached 1.352 %, an increase of 15.7 % last month. The narrow gap between these yen assets has loved investors in recent weeks.
In addition, the governor of the Bank of Japan (Boj) Kazuo Uda indicated that the bank can raise prices if the economy maintains its momentum in growth. The US GDP and Personal Consumption Expenses (PCE) expected on Thursday and Friday will highlight the week, and may affect the USDJPY path in the coming days.
Usdjpy prediction
The USDJPY axis in 149.60 and the resistance at this level will undergo the upper direction, with control of the sellers. This momentum is likely to find initial support at 148.88. However, the extensive control by the sellers will collapse without this level and can see the second support created at 148.50.
Instead, the transition above 149.60 will prefer buyers to control. If this happens, it is possible that the USDJPY currency pair will move and face the first resistance at 150.10. The violation of this barrier will invalidate the bullish direction and can test the second resistance at 150.56.
