USD/JPY Biased to Sell Rallies
USD/JPY rebounded overnight, tracking the USD rebound. The pair was last seen at 149.77, OCBC FX analysts Frances Cheung and Christopher Wong noted.
"The US government memorandum to curb Chinese investment, Biden's tightening of chip controls on China, and Trump's comments that tariffs scheduled to be imposed on Canada and Mexico next month are 'on time' and 'going very fast' led to USD gains."
"Daily momentum is bearish though with signs of fading while RSI is up. Rebound risk not ruled out for the time being but bias to sell rallies. Support at 149.20 (50% Fibo), 148.80 ahead of 147 (61.8% Fibo). Resistance at 150.50, 151.50 (38.2% Fibo retracement from September low to January high)."
"The narrowing of the UST-JGB yield differential should continue to support the broader trend to the downside. Last Friday, Governor Ueda said that yields reflect the economic recovery and rising price trends – consistent with previous comments by BoJ Takata. Ueda also stated that the BoJ will raise interest rates if economic conditions improve as expected."
Source: FXStreet