USDJPY keeping the buyers and the sellers in play

The USDJPY continues to keep both buyers and sellers engaged in a tug-of-war. Following the CPI data release, the price dropped from just above the 200-bar moving average (MA) on the 4-hour chart at 153.79 to briefly break below the converged 100-bar MA on the 4-hour chart and the 200-day MA. However, neither of these technical levels could generate significant momentum during the small breaks.

Currently, the price has settled near the midpoint of these levels at 152.43. This back-and-forth action keeps both sides in play, though the overall tilt remains to the upside. Sellers had an opportunity to drive the price lower after breaching the 200-day MA but failed to sustain the move.

Meanwhile, yields have recovered from earlier lows, with the 10-year Treasury yield rising 2.5 basis points. The 2-year yield remains lower, reflecting a near-certain 25-basis-point rate cut already priced in. However, uncertainty lingers about the Federal Reserve’s course of action beyond December, particularly as the recent decline in inflation appears to be stalling.

This article was written by Greg Michalowski at www.forexlive.com.