USD/JPY bounce needs more work to extend higher

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USD/JPY bounce needs more work to extend higher

<p style="" class="text-align-justify">This comes amid a broad rebound in the US dollar, stemming from the retreat in equities since the Fed yesterday. The dollar is seen up across the board today, posting solid gains as the bulls hope to make a comeback. In the case of USD/JPY, the 200-day moving average (blue line) is the key line that is being defended this week:</p><p style="" class="text-align-justify">That has now seen buyers seize back near-term control, pushing back above the key near-term region highlighted earlier <a href="https://www.forexlive.com/news/dollar-climbs-as-stocks-retreat-in-european-trading-20221215/" target="_blank" rel="follow">here</a>. So, the risk to any further upside move now is the 100 and 200-hour moving averages at 136.27-40 before the 200-day moving average, seen at 135.44 currently.</p><p style="" class="text-align-justify">That said, the recent bounces in the pair have failed to get above the 23.6 Fib retracement level of the downswing since October, seen at 137.94. As such, any upside momentum needs to clear that as well before buyers can feel comfortable of a move back towards 140.00 potentially.</p><p style="" class="text-align-justify">As much as the dollar is getting a tailwind from softer sentiment in equities, the bond market will also need to play ball to vindicate any major rebound in USD/JPY in my view. For now, we're not seeing that too much with 10-year Treasury yields up by just 0.5 bps on the day to 3.488% - lacking any real appetite ahead of US trading.</p>

                This article was written by Justin Low at www.forexlive.com.

Source: USD/JPY bounce needs more work to extend higher

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