Will USD/JPY rise to double bottom neckline?

The Dollar-Yen pair remains well bid in Asia with treasury yields showing signs of life following Friday’s surprise drop in the US unemployment rate.

The spot was last seen trading around Friday’s high of 111.36. The 10-year treasury yield recovered from the low of 2.269% to 2.382% on Friday and was last seen trading around 2.388%.

Double bottom reversal on charts

The daily chart now shows a double bottom reversal formation with neckline resistance at 112.20, courtesy of Friday’s rebound from 110.09 levels.

The American dollar regained the bid tone on Friday after the data showed the unemployment rate dropped to a 10-year low of 4.5% in March. The payrolls, though a big miss (at 98K), is being seen as a one-off figure.

Furthermore, the safe haven demand for the Yen dropped after the Financial Times reported on Sunday that China will offer the Trump administration better market access for financial sector investments and US beef exports to help avert a trade war.

The pair looks more likely than not to test the neckline hurdle around 112.20 as the 10-year yield is held above the key level of 2.3%. Markets seem to have shrugged off the Syria uncertainty for now. Yellen speech due today could boost the US dollar if the central bank chief talks about balance sheet normalization.

USD/JPY Technical Levels

A break above 111.60 (Feb low) would expose 112.00 (zero figure) and 112.20 (double bottom neckline). On the lower side, breach of support at 110.98 (session low) would open doors for a re-test of 110.61 (Mar 24 low) and 110.09 (Friday’s low).