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USD/JPY inches to fresh two-week highs, what’s next?

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Buyers look to buck the trend in search for fresh upside momentum

USD/JPY D1 10-08

The pair is up slightly on the day to 110.45 currently, as 10-year Treasury yields hold its ground at around 1.315% to get European trading underway.

With yields continuing the rebound and holding above 1.30%, that is providing an impetus for yen pairs to try and go in search of a push higher to start the week.

In the case of USD/JPY, buyers will be looking towards 23 July high @ 110.59 as the next key resistance point. Break above that and the 13-14 July highs @ 110.65-70, the pair may be set for a retest of the year’s highs; that is if the bond market cooperates.

In any case, buyers are definitely trying to buck the recent trend of lower highs and lower lows in the pair and that follows a similar narrative in Treasury yields too.

Tomorrow’s US CPI data is the next key risk event on the agenda and higher inflation will continue to challenge the Fed’s patience going into Jackson Hole. The market is to look towards that for a potential catalyst to move again this week.

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