USD/JPY retreats further after Yellen, hits fresh lows under 113.00
|The yen gained momentum across the board after the release of Fed Chair Yellen prepare remarks. Now she is answering to members of the House Financial Services Committee. The tone of Yellen reduced market expectations of a rate hike in September and boosted US bonds, sending yields to the downside.
Fed's Yellen speech: Given current taxing and spending decisions, debt is unsustainable
Fed's Yellen speech: Very focused on trying to achieve 2% inflation target
USD/JPY was already pulling back from 4-month highs (114.48) and turned even lower with the statement. The pair bottomed at 112.93, a 6-day low. Then it bounced to the upside, finding resistance at 113.40. It was trading at 113.05/10, 70 pips below yesterday’ closing price, having the worst performance in a month. From Tuesday’s highs, it lost 150 pips.
Price remains near the lows supported by moves in the bond market and despite the rally of equity prices in Wall Street. The Dow Jones is up 0.55% (reached a new intraday record high) while the Nasdaq gains 0.85%.
Levels to watch
To the upside resistance levels might be located at 113.40 (American session high), 113.75 and 113.95 (Jul 12 high). On the downside, support could be seen at 112.90/95 (daily low), 112.75 (Jul 4 low) and 112.45 (Jun 27 high).
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