Friday, August 9, 2019

USD/JPY - 09 August 2019


Fundamental Highlights

The US Dollar failed to benefit from higher Treasury yields and a better market mood and finished the day modestly lower versus the Japanese Yen. The US treasury yield curve, as represented by the spread between the 10-year and two-year bond yields, is currently the flattest since December 2018. Meanwhile, equities rallied and trimmed weekly losses after suffering a massive selloff on Monday. However, the anti-risk Yen bulls did not buy into this euphoric move in the US equities as the US-China trade stalemate keeps dragging market into the recessionary fears with the spread between the 10-year and 2-year treasury yields of the US likely heading towards an inversion, technically signaling a global recession. Moreover, earlier this morning Japan released a much better GDP numbers, putting additional pressure on the Yen bears.

Technical Analysis

The bulls failed to find enough momentum to potentially form a double bottom at the 105.50 level, as price lost momentum and closed negatively on the day. Currently, the bears are threatening the 105.85 support after multiple retests since the start of the week. A successful break below that level will likely push the pair to retest 105.50, for the third time this week.

Support: 105.85 / 105.50
Resistance: 106.50 / 106.80

Chart (H4)