USD remains soft despite yield rising

USD found some support yesterday as the 10 year treasury yields rose, however remained soft. The rise of the yields stemmed from expectations that the Fed will maintain its 4 rate hike path in 2018 despite criticism by president Trump. Analysts stated that the US economy is in a very healthy state overall and that currently it is unimaginable that the Fed would stop raising interest rates. Should there be further headlines strengthening that scenario, we could see the USD getting further support.

USD/JPY rose yesterday breaking the 111.30 resistance line, correcting somewhat during today’s Asian session. We see the case for the pair to continue in a sideways movement today, maybe with some bullish tendencies. The pair could prove to be sensitive to any further rise of the US treasury yields as well as any tweets from president Trump regarding monetary policy. It also may prove sensitive to any announcements by the Bank of Japan regarding its QE program. Should the pair come under selling interest we could see it breaking the 110.75 support line while should it find extensive buying orders along its path, we could see it breaking the 111.30 resistance line, aiming for the 112.05 resistance hurdle.