USD/JPY prints fresh five-week highs, still unable to run above 115.35
03.01.2022, 16:34

USD/JPY prints fresh five-week highs, still unable to run above 115.35

  • US dollar jumps as US 10-year yield hits 1.60% and the 30-year 1.99%.
  • USD/JPY rises for the fourth day in a row, eyes 115.35/50.

The USD/JPY continues to move to the upside, and it has reached a strong resistance area located between 115.35 and 115.50. It printed a fresh five-week high at 115.36, slightly above the previous top boosted by a stronger rally across the board.

The DXY is up 0.60% so far on Monday, trading above 96.20. Equity prices are modestly higher in Wall Street. The relevant moves at the beginning of the year come from the bond market as Treasuries slide. The US-30 year is at 1.999%, the highest in a month, while the 10-year rose above 1.61%. The 2-year stands above 0.80%, at the highest since March 2020.

Economic data from the US on Monday showed no surprises on Monday. The Markit Manufacturing PMI (final) came in at 57.7 in December, below the flash reading of 57.8. On Wednesday, the ADP employment report is due and on Friday the non-farm payroll. “The recent COVID surge likely came too late to prevent a strong and above-consensus reading for payrolls in this week's report for December”, argue analysts at TD Securities. They forecast an increase in payrolls of 500K.

Looking at recent highs

The USD/JPY peaked in November at 115.51, a multi-year high. From the current level to the mentioned high, resistance is expected to emerge. With the pair around 115.30, the positive momentum remains intact.

On the contrary, a slide under 115.00 would clear the way for a correction, with support levels seen at 114.75 and 114.60.

Technical levels

 

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