USD/JPY: Rising trendline rescues the bulls

• USD/JPY has faded the drop to key ascending trendline support.
• Bulls need the US 10-year yield to break above the 3 percent mark in a convincing manner.

The USD/JPY pair is under pressure, but the ascending trendline, sloping upwards from the March 26 low and April 18 low is saving the day for the bulls.

As of writing, the pair is trading at 108.97, having found takers around the ascending trendline support of 108.78 earlier today.

The outlook remains bullish as long as the rising trendline support is intact. That said, a break above 110.04 (61.8 percent Fibonacci retracement of Jan-Mar sell-off) may remain elusive as long as the 10-year yield remains below 3 percent.  

The spot may defend the trendline support today unless the equities report big losses. Comments from Fed officials - Barkin, Kaplan and Evans - could influence the exchange rate.

USD/JPY Technical Levels

A close below the trendline would mean the corrective rally from the low of 104.63 has ended and would open the doors to 107.00 (zero levels) and 106.88 (April 17 low). On the higher side, a move above 109.20 (session high) would open up upside towards 109.54 (April 27 high) and 110.04 (May 2 high).