USD/JPY upside capped near 109.80 ahead of Yellen

The Japanese currency remains on the defensive so far today, pushing USD/JPY to the upper end of the range in the 109.70/80 band.

USD/JPY propped up by USTs

Spot is advancing for the second session in a row so far today, looking at the same time to break above the weekly consolidation theme between the mid-108.00s and levels just below the critical 110.00 handle.

The pair is trading in tandem with the performance of yields in the US money markets, where yields of the 10-year reference are also up for the second session in a row and testing tops around the 2.20% level.

Later in the session, USD should remain under pressure in light of the speech by Chief J.Yellen at the Jackson Hole Symposium, with the next steps regarding tightening and the Fed’s plans to reduce its balance sheet on top of the agenda.

Further US data will see July’s durable goods orders.

USD/JPY levels to consider

As of writing the pair is gaining 0.09% at 109.66 facing the next hurdle at 109.92 (21-day sma) followed by 109.98 (23.6% Fibo of 114.51-108.58) and then 110.95 (high Aug.16). On the other hand, a breach of 108.82 (low Aug.24) would aim for 108.61 (low Aug.21) and finally 108.58 (low Aug.18).