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USD/JPY Rallies, Resistance At 109.00

Shain Vernier•Tuesday, December 10, 2019•2 min read

The Greenback’s largest bright spot on today’s forex is the USD/JPY. Rates have defied the action of other safe havens, as bids have hit the market in mass. In cases where GOLD rises and USD/CHF falls, the USD/JPY typically follows suit. However, conventional wisdom has been incorrect today as this market is trending higher.

On a side note, the U.S. government debt benchmark 10-Year Note was auctioned off earlier today. Yields grew to 1.842%, up from the previous figure of 1.809%. The auction didn’t show the high demand that recent shorter-term debt issues have and yield growth was the ultimate product.

In other news, it appears as though USMCA is finally going to be signed and ratified. At this point, it is difficult to say how this event will impact the markets. However, anything is possible for equities and the USD as we roll toward late-session trade.

For the USD/JPY, rates are nearing several daily resistance levels. With a bit of luck, a shorting opportunity will come into play ahead of tomorrow’s U.S. CPI and FOMC Minutes.

USD/JPY: Technical Outlook

Anytime that you have multiple support or resistance levels converge, a solid trading opportunity may be just around the corner. For the USD/JPY, we have three daily resistance levels present within a 5 pip range.

USD/JPY, Daily Chart
USD/JPY, Daily Chart

Here are three resistance levels to watch going into Wednesday’s session:

  • Resistance(1): Bollinger MP, 108.89
  • Resistance(2): 38% Current Wave, 108.92
  • Resistance(3): Daily SMA, 108.94

Bottom Line: At press time (about 2:10 PM EST), the USD/JPY is trading near 108.70. If we see topside extension in the coming hours, a shorting opportunity will come into play.

Until tomorrow’s FOMC Minutes, I will have sell orders queued up from beneath the Bollinger MP at 108.84. With an initial stop at 109.27, this trade produces 40 pips on a slightly 1:1 risk vs reward management plan.

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ABOUT THE AUTHOR See More
Shain Vernier
US Analyst
Shain Vernier has spent over 7 years in the market as a professional futures, options and forex trader. He holds a B.Sc. in Business Finance from the University of Montana. Shain's career includes stretches with several proprietary trading firms in addition to actively managing his own accounts. Before joining FX Leaders, he worked as a market analyst and financial writer.
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