The USD/JPY steadily advanced on Wednesday and is up 0.50% amidst a mixed market mood session as equities rise while recessionary fears bolster safe-haven currencies. At the time of writing, the USD/JPY is trading at 135.91, shy of weekly highs around 137.00.
The sentiment is mixed as Wall Street closed. US equities rose, except for the Russell 2000, while in the meantime, in the FX market, a risk-off impulse keeps the safe-haven currencies in the driver’s seat.
Regarding the USD/JPY, the greenback got boosted by climbing US Treasury yields. The US 10-year yield erased Tuesday’s losses, rising twelve basis points at 2.932%, a tailwind for the USD/JPY.
The USD/JPY daily chart illustrates the pair as neutral-upward biased. Nevertheless, the major broke a rising wedge, though it remains to trade in the 134.90-136.90 area, signaling that “some” buying pressure lies ahead. However, risks of an intervention by Japanese authorities keep USD/JPY traders uncommitted to lift prices higher, which could open the door for a test of August’s 1998 highs around 147.67.
USD/JPY traders should be aware that a rising wedge was broken to the downside, meaning that prices at a certain time might fall towards 132.50 (the rising wedge profit target). After that, a re-test of the YTD highs around 137.00 is on the cards.
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