Forex Marketz Daily Forex News – Fully Markets Update
On Friday the dollar closed above 109.35 yen as the benchmark USD/JPY currency exchange rate spiked north. This Forex market has been recovering over the last few weeks. It rose 1.7 percent one week, then the USD/JPY rose again the following week by 3.1 percent, then paused and then moved higher.
During the North American trade session on Friday, the U.S. dollar paused a bit but remains fully in control despite some early mid-week profit taking. The greenback is following Treasury yields higher.
U.S. Treasury yields are once again moving higher. The ten year Treasury bond saw its yield spike higher on Friday back to 1.62 percent. Also supporting the dollar, the U.S. Congress passed the massive $1.9 trillion fiscal aid package. This package will send direct payments of $1,400 to households. State and local governments will get $350 billion in federal aid.
The Paycheck Program for loans to small businesses will also receive $7.25 billion in additional funds. Due to this, the dollar was supported at the expense of the Japanese yen. The USD/JPY currency exchange rate, as seen on the above daily MT 4 chart as rallied higher. This week both the U.S. Federal Reserve and Bank of Japan will announce monetary policy.
Daily US Dollar Technical Analysis (USD/JPY)
The USD/JPY currency exchange rate is simply following U.S. bond yields higher. As rates move higher, technical levels become weaker and of little importance to Forex traders. As the headline ten year Treasury bond yield rose back to 1.62 percent on Friday, the price level of 108.40/41 yen became the new base in the USD/JPY currency exchange rate.
Looking at the 14 day relative strength index (RSI) which is overbought and at 77.05 to start the week off, this should be, under normal circumstances be a sell signal. However, the greenback’s strength will follow Treasury yields at this point.
On the downside, immediate technical support lines up at the 21 day simple moving average at 106.77. The one hundred day simple moving average lines up at 105.67 yen and the two hundred day simple moving average comes into focus at 105.50 yen.
