USD/JPY erases gains, drops toward 115.00

USD/JPY continued to decline after hitting earlier today at 116.11, the highest level since February. Recently the pair bottomed at 115.07 and it was trading at 115.15/20, less than 10 pips below Friday’s closing price. From daily highs, it has fallen a hundred pips. 

A weak US dollar and a recovery in US treasuries weakened the pair. The 10-year yield, that earlier climbed above 2.50% (highest since 2014) retreated and it was standing at 2.745%. Equity prices in Wall Street were mixed while gold prices recovered from multi-month lows, with XAU/USD rising above $1160. 

So far the correction in the USD/JPY remains modest and the US dollar was still keeping most of last week gains. According to Strategists at UOB Group the current positive undertone “is intact unless there is a move back below 114.30”. 

USD/JPY scope for a test of 116.50 – UOB

Technical levels 

To the downside, support levels might be located at 115.00 (psychological), 114.75/80 (Dec 01 & 05 high) and 114.40 (Dec 04 high). On the opposite direction, resistance could be seen at 115.55 (20-hour moving average), 115.85 (intraday level) and 116.10/15 (daily high).