USD/JPY: Impulsive Selloff As US Yields Roll Over

The aggressive selling of the exchange rate is about to reach its 100% proj target at 111.30-35, an area that aligns with a sequence of multiple lows from early April. The rollover of the US Dollar occurs in line with the resumption of the bearish trend in US yields even if the DXY is not yet reflecting a bearish microtrend as per the slope of the 25HMA. Moreover, with very bullish equities (7 rising days in a row), one would think the mentioned target of 111.30-35 would see a major cluster of bids as market participants find value in joining the bid at what’s perceived as cheap prices in the current context. The rising trendline from March 25th is another technical backup buyers can resort to as further evidence that any buy on dips strategy is still very much entered in a rather constructive environment.