The Dollar/Yen lingers above the band of support between 101.20 (lows, 3/14-101.21, 3/17-101.24, 3/18-101.28) and 100.75, (lows 2/3-100.78, 2/4-100.76, 2/5-100.80).
Since the break of trend support on Thursday at 101.65 (101.68--6/13/13, 101.63 2/4/14), the pair has been cornered below the February trend line, upward motion having halted there Friday, Monday and today and the 101.20 support. The 200 day moving average adds emphasis at 101.25.
The 10-year generic U.S. Treasury yield had lost 19 basis points from Tuesday (high 2.66%, close 2.61%) to Thursday (low 2.47%, close 2.49%) last week and that helped the Dollar/Yen through the trend line support (101.65) that had held since last June. Yields have stabilized this week, rebounding as high as 2.55% today. Resistance is the 10-year yield is at 2.57%, the low from February 3rd until Thursday's collapse. The U.S. yield would have to break back into the 2.60%-2.80% range before it could provide additional upward pressure to the dollar in the currency markets.
The Dollar/Yen upside is currently more problematical, with resistance at the two aforementioned trend lines 101.65 and 101.80.
Japanese machine tool orders ( March 19.1%) and first quarter GDP (5.9% annualized) are not conducive to a further Bank of Japan assault on the Yen, even though both figures were likely influenced anticipatory spending in front of the pending rise in Japan's sales tax. A return to 102.00 and 102.25 would be needed for traders to reconsider the markets mild pro-dollar stance.
102.36 May 14 high
102.31 55 day moving average
102.04 21 day moving average
102.00 Moderate offers
101.80 Good offers June 13 trend line resistance
101.65 Good offers February 4 trend line resistance
101.25 Market rate 1:00 pm Tuesday
101.25 200 day moving average
101.20 Moderate support
101.19 Intra-day low
101.00 Good support
101.80 Good support
100.75 2014 low, February 4th
100.70 Large stops
100.05 Strong Support
Chief Market Strategist
WorldWideMarkets Online Trading