USD/JPY is down another 0.2% today to 146.90 currently and is contesting a drop below its 100-day moving average (red line) of 147.05. It is also the first time that the pair is seen crossing the line below either of its key daily moving averages since May. And that is a major technical story developing with regards to the pair and the dollar in general.
The drop in the last month has a lot to do with the decline in Treasury yields, especially with 10-year yields also breaking below its own 100-day moving average as highlighted here yesterday.
And if the rally in bonds look set to continue, that will just mean more pain for the dollar and a further correction lower in USD/JPY with the next target being at 145.00. This is one key spot to watch as it should also hint at dollar softness against the rest of the major currencies bloc too.
