U.S. yields are pushing to new highs after another round of stronger-than-expected data. The ISM non-manufacturing index beat forecasts, reinforcing the upbeat tone set earlier by a solid ADP employment report. Together, the data painted a picture of continued economic resilience and triggered fresh selling in Treasuries.
The 10-year yield is now up 5.2 basis points at 4.143%, extending its rebound from the October 22 low of 3.936%—the lowest level since April. The year-to-date low remains at 3.860%, also set in April, leaving plenty of room before retesting those levels. From a technical perspective on the topside, the 100 day moving average of the 10 year yield is at 4.215% and represents the next key target for yield.
Rising yields have lifted the U.S. dollar, with USDJPY climbing to a new session high of 154.30. The pair is now approaching the swing-high zone between 154.44 and 154.48 seen over the past two sessions. A sustained break above that band would open the door toward 154.74, and potentially set the stage for a fresh leg of upside momentum if buyers can keep control.
Looking at the hourly chart below, sellers had their opportunity earlier today when the price dipped below the 200-hour moving average, but they couldn’t hold it there. The failure flipped momentum back to neutral, keeping the pair trading between the 100- and 200-hour moving averages.
During the early U.S. session, a stronger ADP report helped lift the price above the 100-hour MA (blue line on the chart below), and that upside accelerated further after the ISM data. Those moving averages now serve as risk-defining levels for buyers looking to build on the bullish momentum.
If the price cannot move back below those levels, the buyers are winning. The sellers are not.
This article was written by Greg Michalowski at investinglive.com.