Yen Tracking Yield Spreads again?
During yesterday's sleepy markets, I highlighted in this tweet the rally in bund futures (rising prices, falling yields) may signal similar price action at the subsequent session, when US bond yields/prices return from Memorial Day Weekend. Today's bond price action did not disappoint, as the homogenous asset class moved in concert, delivering gap ups in prices and falling yields. This was a desperately needed development for yen bulls (particularly USDJPY shorts). Interpret what you wish from the chart below as to which is the dependent and independent variable (USDJPY or yield spread). Who leads whom? Shorting USDJPY has been the "pain trade" for our WhatsApp Broadcast Group, as we await Wednesday's debt ceiling vote and the JOLTs survey. Hanging in there.
Resistance: - 1351.40 and 1360.26(main), where a correction may happen. Break would bring 1373.50, where a correction may also happen. Then follows 1386.72. Be there a strong impulse, wed see 1395.00. Continuation would bring 1402.43.
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Resistance: - 1364.87(main), where a correction may happen. Break would bring 1372.50, where a correction may also happen. Then follows 1378.13. Be there a strong impulse, wed see 1389.38. Continuation would bring 1402.43.
Resistance: - 1285.31(main), where a correction may happen. Break would bring 1291.94, where a correction may also happen. Then follows 12302.18. Be there a strong impulse, wed see 1315.22. Continuation would bring 1326.74.
Resistance: - 1226.24(main), where a correction may happen. Break would bring 1232.20 where a correction may also happen. Then follows 1237.46. Be there a strong impulse, wed see 1241.58. Continuation would bring 1241.58.
Resistance: - 1192.50(main), where a correction may happen. Break would bring 1198.13, where a correction may also happen. Then follows 1203.80. Be there a strong impulse, wed see 1215.00. Continuation would bring 122263.