The USD/JPY extend its rally to three days in a row advancing 0.23%, trading at 115.42 during the New York session at the time of writing. The market mood is in risk-off mode, with US stock indexes falling, US bond yields in the short-term rise, while the long-end dropped, while the greenback stays firm.
The US Dollar Index, a gauge of the greenback’s value against six rivals, advance 0.39%, sitting at 96.87 at press time. Contrarily, the US T-bond 10-year benchmark note drops one basis point, stays at 1.653%.
During the Asian and European sessions, the USD/JPY dipped as low as 114.83, right at the 1-hour 50-simple moving average (SMA), bouncing off those levels up to a break of the 115.00 figure. As US economic data was released during the New York session and the greenback strengthened, the USD/JPY advanced.
The USD/JPY has an upward bias, depicted by the daily moving averages (DMA’s) located below the spot price, with an upslope, confirming the bullish bias. On Tuesday, USD bulls failed to break above the 115.00, which they accomplished on Wednesday, thus negating the bearish wedge.
At press time, the pair is testing the March 2017 swing high at 115.51 as well as the 115.60 61.8% Fibonacci retracement of the move down from 2015. A breach of that level would expose the psychological 116.00 level.
On the flip side, failure to overcome the March 2017 strong resistance could pave the way for a correction. The first demand zone would be 115.00, followed by the October 18 swing high-turned support at 114.48, and then the psychological 114.00.
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