USD/JPY - Rejected at 4-hour 50-MA

The Dollar-Yen pair failed to take out 4-hour 50-MA in Asia despite the uptick in the treasury yields.

At the time of writing, the 4-hour 50-MA was sloping downwards at 114.82, while the pair was trading around 114.55 levels.

The bid tone around the US dollar strengthened in the late North American session following Yellen’s hawkish comments. The 10-year Treasury yield added four basis points as well.

Despite this, the spot failed to take out the 4-hour 50-MA and fell back to 114.55 levels. This may be due to the realization that Yellen was slightly dovish rather than hawkish as initially perceived.

Allianz’s El-Erian, while talking to Bloomberg, said the stage was set for Yellen to sound hawkish, however, “she did not go there”.

USD/JPY Technical Levels

A break above 4-hour 50-MA level of 114.82 would open the doors to 115.44 (Jan 13 high) and then to 116.04 (Nov 30 low). On the other hand, a breakdown of support at 114.54 (23.6% fib retracement of Trump rally) would shift risk in favor of a drop to the upward sloping 50-DMA currently seen at 114.05. A break lower could yield 112.87 (Dec 5 low).