USD/JPY Analysis:
US Dollar and US 10 Year Treasury Yields Rise
The US dollar[5] has strengthened against many of its peers in the wake of the elevated 10-year US treasury yield, which hit 1.6% during early trade on Monday. The relatively high yield remains at similar levels which may be the result of the recently approved $1.9 trillion stimulus package through the US Senate.
The sell-off in bonds could potentially be interpreted as an indication of optimism around an expected economic recovery, as investors and institutions tend to become more risk-seeking in an attempt to maximize returns.
Chart prepared by Richard Snow. Source: Tradingview
USD/JPY Risk Events in the Week Ahead
Major risk events for the USD/JPY[6] pair include Japanese Q4 GDP[7] on Tuesday and US inflation[8] data for February.
For all market-moving data releases and events see the DailyFX Economic Calendar[9]
Key Technical Levels for USD/JPY
The recent break above the resistance[10] (topside of the bullish channel) adds to the bullish posture of the market since the January swing low. The recent move however has thrown the relative strength index[11] (RSI) well into overbought territory which may result in a short term pullback towards trendline support (previous resistance) around the 108.00 or even 107.80 level. However, this may serve as a launchpad for bulls to enter the market as it may offer a better entry level.
It must also be
