USD/JPY gains momentum on surging US Treasury yields

The USD/JPY pair hit new five-week highs at 134.57; it is currently trading at 134.42, with bulls seeking 135.00. The USD/JPY oscillators favour more upward movement. Below 134.00, there are dangers on the downside that could push the USD/JPY rate as low as 133.00.

Following the Federal Reserve (Fed) policymakers’ hawkish remarks from the previous week, the USD/JPY appreciated as US Treasury bond yields resumed their upward trajectory. The most recent increase in the yield on 10-year US T-bonds was brought on by remarks made by Fed Board Governor Christopher Waller that further tightening is required. As a result, the USD/JPY increased and is now up 0.52% at 134.47.

Regarding price movement, the USD/JPY pair increased its gains past the high of the previous week at 134.04 and is attempting to test a break above the high set on January 6 at 134.77. The 200-day Exponential Moving Average (EMA) at 133.70 and the 100-day Exponential Moving Average (EMA) at 134.00 were two strong resistance levels that the USD/JPY overcame on its ascent. Following the pair’s completion of those levels, a challenge to 135.00 is planned.

If USD/JPY gains ground above 135.00, the psychological 137.00 level would be the next barrier to overcome before reaching the YTD high at 137.91. On the other hand, the 100-day EMA at 134.00 would act as the first support if the USD/JPY retraced. The 200-day EMA at 133.70 will be instantly exposed with a violation of the latter, then the 50-day EMA. Before falling to 133.00, at 133.14.