As the US session begins, the USDJPY emerges as the most significant mover. It has rebounded to the upside, extending beyond technical levels. This pair shows a 0.66% increase at the start of the US trading session. Yields are on the rise, with the 10-year yield up by about 4.5 basis points to 4.421% and the two-year yield increasing by 2.8 basis points to 4.2996%. The dollar is stronger against all major currencies, with gains of 0.47% against the NZD, 0.35% against the AUD, and 0.33% against the EUR, contributing to these gains. US stocks are poised to move higher, despite Target facing a setback after earnings disappointed this morning. The Dow futures imply a gain of 143 points, retracing the -120-point decline from yesterday. The S&P rose by 33.36 points yesterday and is up again. The Nasdaq is up 50 points, following a 195-point or 1.04% increase yesterday.
Unraveling the Dynamics of US Markets
USDJPY's Bounce Back
The USDJPY witnessed a significant downward movement earlier, testing the broken 61.8% of the decline from the July high to the low in September at 153.397. However, yesterday it reached a low of 153.27, giving sellers a chance. But they missed as the price snapped back higher. Today, it has extended back up and broken through a swing area between 154.54 and 155.21. This area now poses a risk for both buyers and sellers. Staying above is more bullish. Looking at the hourly chart, the price rise yesterday moved above the 200-hour MA in the US afternoon and remained above it today. This gave buyers the confidence to push the price even higher. The price is currently trading at the highs as the US session begins.Impact of US Yields
US yields are on an upward trajectory and nearing their daily highs, providing a tailwind. The 2-year yield is up by 3.4 basis points to 4.306%, and the 10-year yield is up by 4.9 basis points to 4.427%. These higher yields have a significant influence on the currency markets and contribute to the overall market sentiment.Other Major Currencies
The GBPUSD extended higher in trading today, advancing above a swing area between 1.2654 to 1.26858, which is a bullish sign. The momentum took the price to a high of 1.27138, which was near a swing low from last week and a corrective swing high. However, it fell short of the broken 61.8% retracement level at 1.27322. Buyers turned into sellers, and the price has now returned to the aforementioned swing area and is testing the low at 1.2654. A move below 1.2654 would lead traders to look back towards the lower swing area between 1.2596 to 1.26137.The USDCHF moved lower yesterday and retested the 50% midpoint of the decline from the May 1 high at 0.87986. The low price yesterday reached 0.8800, a natural support target. The price also fell below its 200-day moving average and a swing area near 0.8819 and 0.8826, but both these levels were rebroken, and the price has extended higher today. Sellers made an effort but could not stay below the 200-day moving average nor break back below the 50% midpoint. So, buyers still maintain control. To continue the upward movement, the price needs to stay above the 200-day moving average. On the upside, there is resistance at a swing area between 0.8880 and 0.8900. Last week, the price extended above this area but failed, leading to the corrective move lower this week. There is a battle between buyers and sellers with the 50% near 0.8800 and the 0.8900 level above providing the key support and resistance levels that need to be broken to either increase the bullish or bearish bias.In other markets, crude oil is up $0.56 or 0.79% at $69.78. Gold is up three dollars or 0.12% at $2635.20. Bitcoin is up around $1400 or 1.6% at $93,899. Yesterday, a new all-time high was reached at $94,057.Fed speak today includes FOMC Gov. Michael Barr at 10 AM ET, who is the vice chair and in charge of supervision. FOMC Gov. Lisa Cook will speak at 11 AM ET, and FOMC Gov. Michelle Bowman will speak at 12:15 PM ET. Crude oil inventory data for the current week will be released at 10:30 AM ET. The private data showed expectations of a crude oil increase of 0.138M, gasoline increase of 0.859M, and distillates decrease of 0.020M.