USD/JPY: On the defensive despite uptick in the treasury yields

• USD/JPY breached a key ascending trendline, hit a low of 110.70 in Asia.
• The uptick in the treasury yields is not helping the US dollar.

Currently, the USD/JPY pair is trading at 110.80, having clocked a session low of 110.70 earlier today.

The currency pair breached the trendline sloping upwards from the March low of 104.63 and May 29 low of 108.11 on Wednesday after the EU-US trade talks lifted risk sentiment and triggered a broad-based weakness in the US dollar.

Further, CNY recovery is also helping JPY and other Asian currencies post gains against the US dollar.

More importantly, the 10-year treasury yield jumped to a six-week high of 2.976 percent on Wednesday and has risen by 14 basis points in the last seven days, but so far, has failed to put a bid under the USD.

Looking ahead, the pair may find acceptance below the 50-day moving average (MA) of 110.55 if the US June durable goods orders number, scheduled today at 12:30 GMT, prints below estimates.

USD/JPY Technical Levels

Resistance: 111.15 (5-day moving average), 111.40 (May 21 high), 112.00 (200-hour moving average).

Support: 110.55 (50-day moving average), 110.09 (200-day moving average), 109.91 (38.2 percent Fibonacci retracement of the rally from the March low of 104.63).