10-year yields in the US are up over 4 bps to 4.726% currently and that is continuing to keep the dollar more bid across the board. USD/JPY has been relatively cautious in pushing the invisible boundary set out by Tokyo at the 150 mark but it almost seems inevitable that we will breach past the figure level at this point.

Whether or not that will trigger intervention by Japan remains to be seen but the pressure is continuing as Treasury yields are shooting for the stars as seen in the chart above.

For today, there are large option expiries at the figure level for USD/JPY as well but as mentioned here, it’s more of a psychological battle more than anything else for the pair right now.

As we look towards US trading, the pair is trading at 149.94 and that is just a hop, skip, and a beat away from running off above 150.00 once buyers touch the key threshold.

This article was written by Justin Low at www.forexlive.com.

After a bright start to European trading (similar to yesterday), equities are feeling a bit jittery once more as we look towards US trading later. US futures have turned lower in the last one hour and European indices are back in the red after having pared opening losses today.

It is all about higher Treasury yields once again and 10-year yields are now up 4 bps to 4.724% on the day. That is weighing on equities sentiment while also keeping the dollar underpinned with USD/JPY hovering just under the 150.00 mark at 149.93 currently.

This article was written by Justin Low at www.forexlive.com.

US:

• The Fed left interest rates unchanged as
  expected.
• The macroeconomic projections were revised higher
  as the economy showed much stronger resilience than expected and the Dot Plot
  showed that the majority of members still expects another rate hike by the end
  of the year with less rate cuts in 2024.
• Fed Chair Powell
  reaffirmed their data dependency but added that they will proceed carefully as
  they are trying to find the optimal level of rates. Powell also added that the
  soft landing is not the base case at the moment, although they are aiming for
  it.
• The latest US Core PCE
  came
  in line with expectations with disinflation continuing steady.
• The labour market
  displayed signs of softening although it remains fairly solid as seen also last
  week with a strong beat in Jobless Claims.
• The ISM Manufacturing PMI beat
  expectations yesterday in another sign that the US economy remains resilient.
• The market doesn’t expect the Fed to hike again at
  the moment.

Australia:

• The
  RBA kept interest rates unchanged as expected as they are seeing inflation
  returning to target with the current level of interest rates.
• The
  latest monthly CPI showed that core inflation is
  slowing.
• The
  labour market is weakening as we got a big miss
  in July and the bulk of jobs added in August were part time.
• The
  Australian Manufacturing PMI fell further into contraction while
  the Services PMI jumped back into expansion.
• RBA
  Governor Lowe in his speech reaffirmed that if inflation remains sticky, they
  will have to tighten more.
• The
  market expects the RBA to hold rates steady at the next meeting as well.

AUDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that the AUDUSD pair
got rejected from the 0.65 resistance again
and sold off into the support, ultimately breaking it. The target for the
sellers should be the 2022 low around the 0.6168 level. For now, we can expect
the pullbacks to be faded as the sellers remain in control.

AUDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the pair is
now a bit overstretched on the downside as depicted by the distance from the
blue 8 moving average. In such
instances, we can generally see a pullback into the moving average or some
consolidation before the next move. In fact, we might see a pullback into the
broken support turned resistance which
could end up in a classic “break and retest” pattern. This is where we can
expect the sellers to step in with a defined risk above the resistance to
target the 0.6168 level. The buyers, on the other hand, will want to see the
price breaking above the resistance to start targeting the 0.65 level again.

AUDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that we
have a trendline that
might act as resistance in case the bearish momentum proves to be strong. That
will be the first shorting point for the sellers, with the resistance around
the 0.6370 being the last line of defence. The buyers should pile in at every
break, but they will need the price to rally above the 0.6380 level to
invalidate the bearish setup and target the 0.65 resistance.

Upcoming Events

This week we have many key economic releases that will
culminate in the US NFP report on Friday. Today, we will have the US Job
Openings data which led to a strong rally the last time as the big miss made
Treasury yields to fall due to less labour market tightness and less hawkish
Fed expectations. Tomorrow, it will be the time for the ADP report and the ISM
Services PMI. On Thursday, we will see the Jobless Claims data, which continues
to show a solid labour market. Finally on Friday, it will be the time for the
NFP report which is the only one the Fed will see before its next rate
decision.

This article was written by FL Contributors at www.forexlive.com.