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FOREX: USDJPY Extends Rally Above 150.50 Amid Higher Core Yields

FOREX
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  • With the moves in currency markets being driven by higher core yields on Monday, it is unsurprising to see both the US dollar outperforming and consistent pressure on the Japanese Yen. USDJPY (+0.80%) has extended through last week’s recovery high, and has reached an initial target of 150.76 (50% of the Jul 3 - Sep 16 bear leg) as we approach the APAC crossover.
  • The pair maintains a firmer tone and bullish signals remain intact with price trading above the 50-day EMA. The recent break of this average marked a bullish development highlighting a stronger reversal. Sights are now on 151.94, the Jul 25 low.
  • As a result of the USD strength, EURUSD has failed in it's attempt to retake the 200-dma resistance, which held well at 1.0872 in not just Asia-Pac trade - but also on intraday rallies across Thursday and Friday. Spot has narrowed the gap substantially to the cycle lows at 1.0811.
  • The move down has exposed 1.0778, the Aug 1 low and the next key support. Clearance of this level would strengthen a bearish theme.
  • GBP has been among the poorer performers in G10 Monday, alongside the firmer dollar. GBPUSD (-0.50%) has slipped back below the 1.3000 handle, narrowing the gap to last week’s low at 1.2974.
  • Last Wednesday’s break lower confirmed a resumption of the current bear cycle and an important support at 1.3002, the Sep 11 low, has been breached, reinforcing the current theme. Price action initially targets 1.2959, a Fibonacci retracement point, and below here markets will turn their focus to 1.2890, the Aug 18 low.
  • A quiet Tuesday calendar will keep the focus on any comments from BOE Governor Bailey and Wednesday’s Bank of Canada decision.
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  • With the moves in currency markets being driven by higher core yields on Monday, it is unsurprising to see both the US dollar outperforming and consistent pressure on the Japanese Yen. USDJPY (+0.80%) has extended through last week’s recovery high, and has reached an initial target of 150.76 (50% of the Jul 3 - Sep 16 bear leg) as we approach the APAC crossover.
  • The pair maintains a firmer tone and bullish signals remain intact with price trading above the 50-day EMA. The recent break of this average marked a bullish development highlighting a stronger reversal. Sights are now on 151.94, the Jul 25 low.
  • As a result of the USD strength, EURUSD has failed in it's attempt to retake the 200-dma resistance, which held well at 1.0872 in not just Asia-Pac trade - but also on intraday rallies across Thursday and Friday. Spot has narrowed the gap substantially to the cycle lows at 1.0811.
  • The move down has exposed 1.0778, the Aug 1 low and the next key support. Clearance of this level would strengthen a bearish theme.
  • GBP has been among the poorer performers in G10 Monday, alongside the firmer dollar. GBPUSD (-0.50%) has slipped back below the 1.3000 handle, narrowing the gap to last week’s low at 1.2974.
  • Last Wednesday’s break lower confirmed a resumption of the current bear cycle and an important support at 1.3002, the Sep 11 low, has been breached, reinforcing the current theme. Price action initially targets 1.2959, a Fibonacci retracement point, and below here markets will turn their focus to 1.2890, the Aug 18 low.
  • A quiet Tuesday calendar will keep the focus on any comments from BOE Governor Bailey and Wednesday’s Bank of Canada decision.