USD/JPY - Rising T-yields favor upside break of short-term range

• USD/JPY is stuck in a narrow range of 112.00-112.80.
• Rising Treasury yields favor a move higher to 113.00 levels.

The Dollar-Yen pair awaits range breakout.

Valeria Bednarik, Chief Analyst at FXStreet writes, "The upside is being limited by selling interest around 112.80, where it topped this Monday's and last Thursday, while short-term buyers are defending, for now, the 112.00 region."

The currency pair fell to a low of 112.31 yesterday reportedly due to strong Japanese trade data. However, the dip was short-lived as the 10-year treasury yield rose from 2.36 percent to 2.4 percent. The rising yield put a bid under the USD.

As of writing, the pair is trading at 112.60 and the yield is attempting a break above 2.4 percent. Ivan Delgado, Chief Editor at FXStreet, writes, "the USD/JPY keeps finding further bids above the 112.50, with both global equities and the yield spread, suggesting a potential attack towards 113.00 this week."

USD/JPY Technical Levels

Valeria Bednarik, Chief Analyst at FXStreet, says, " The pair is still biased lower, according to technical readings on the 4 hour chart, as the price develops below its 100 and 200 SMAs that anyway continue lacking directional strength, while technical indicators hover within negative territory, also failing to indicate a certain prevailing demand.

Support levels: 112.00 111.60 111.20

Resistance levels: 112.80 113.10 113.45