USD/JPY: Perfect Bullish Storm, Poor Risk-Reward

The USD/JPY, as in the case of Gold, are two markets currently experiencing the perfect storm as the DXY rises in tandem with soaring US yields. From an hourly perspective, the market spent the entire Friday trading up through overbought conditions as per the slow stoch readings, which was a scenario able to be achieved due to the consistent sell-off of US bonds (higher yields). We can notice the growing influence that US yields have exerted on the price of the pair as of late, with the micro and macro correlation coefficients rising fast. Finding the appropriate technical levels to engage in ‘buy on dip’ strategies is the base scenario as per the latest technical/intermarket analysis, with the trend, the market structure and the slopes in the micro and macro backing up the trend.