USD/JPY: 148.70 cleared as yields and momentum align

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USD/JPY: 148.70 cleared as yields and momentum alignU.S. Dollar / Japanese YenFOREXCOM:USDJPYdavidscuttAided by the latest leg higher for U.S. Treasury yields following the June U.S. inflation report, USD/JPY closed at the highest level since April on Tuesday, taking out the important 148.70 level in the process. If the pair manages to consolidate the break on Wednesday ahead of separate U.S. PPI data for June, the level may revert to offering support, providing a platform for new long positions to be established with a stop below for protection. The 200-day moving average is the first major hurdle for bulls to overcome, sitting today at 149.63. If it were to be taken out, it would only add to the bullish price action seen recently. Above, 150 will naturally receive some attention given it’s a major big figure, although there’s little visible resistance until 151.00. If USD/JPY were to reverse back below 148.70 and close there, it would provide bulls with some food for thought, opening the door for a potential retest of the uptrend the pair has been sitting in since the start of July. However, the message from momentum indicators like RSI (14) and MACD is firmly bullish. With the 50-day moving average also starting to curl higher, near-term price momentum is definitely with the bulls, favouring buying dips in this environment.