USD / JPY gains remain constrained by key trendline resistance levels as market awaits further clues from Fed and Biden proposal
10-year rates jumped to 1.115% earlier, but are now down to 1.098%.
In turn, the dollar’s first jump mostly eased, with USD / JPY retreating to 104.00 after hitting a high of 104.20 earlier today.
As it stands, the major trendline resistance levels that have been in play since the final stages of last week are still very active at this time.
This sits in the 104.10-27 region and serves to limit any upward momentum in the pair for now as we wait for more indices from Powell and Biden.
Beyond that, there is also the 100 day moving average (red line) @ 104.64 – a key technical level that has not been crossed since early June of last year.
Putting it all together, the risk levels for any higher major pushes in the pair are pretty clearly defined according to the technical levels above. A breach beyond these levels will reinforce a further push for the pair – and the dollar – towards at least 105.00 and above.
As much as one can argue that an increase in stimulus spending may also be negative for the greenback, but it is difficult to argue with the charts and the USD / JPY holds the key in this regard.