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Will USD/JPY Hold the 108 Support Area? Probably Not For Long

The $USDJPY has been falling sharply and is now testing a common support around $108. We can see this as support pivot going back to 2017.

USD/JPY Daily Chart

(click to enlarge)

Subtle Bearish Sign:
- USD/JPY has been essentially trading sideways since 2017. 
- But we did see price dip to almost 104.50 in early 2018.
- Also, in 2019 the pair failed to rally to the consolidation resistance around 114.55.
- The failure to reach the range resistance suggests bears might be in charge. 
- Thus I think after some possible "stickiness" around 108, price will fall towards the 104.55 2018-low. 

Investing.com suggests downside potential as well due to short-term yield spreads. Essentially the small carry-trade opportunity is even weaker now so there is not much upside for USD/JPY from the carry-trade perspective.

The Yield Spread Albatross Around USD/JPY's Neck

...
The culprit, once again, is collapsing US yields. Short-term yield spreads are one of the strongest drivers of currency values. So far this year, Japanese 2-year yields have held steady in the -0.15% to -0.20% range for the past six months, meaning that the recent collapse in 2-year US treasury yields has decreased the US’s premium over Japan from above 3% in November just above 2% now.
...


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