USD/JPY prints session highs above key long-term falling trendline

• USD/JPY is trading above the descending trendline, drawn from November high and December high.
• Still resistance at 110.04 - 61.8 percent Fibonacci retracement of Jan-Mar sell-off.
• USD bulls need 10-year treasury yield to move above 3.041 percent in a convincing manner.

The USD/JPY has taken out the 5-month descending trendline and has printed a fresh Asian session high of 109.84.

The bid tone could be associated with the US 10-year yield's move above 3 percent. As of writing, the yield is trading at 3.015 percent - up two basis points. Still, it is too early to call resumption of the rally from the March low of 104.63.

This is because the spot is yet to take out the resistance at 110.04 - 61.8 percent Fibonacci retracement. A break higher would confirm the double top violation and would confirm revival of the rally from 104.63.

Further, the dollar bulls need the 10-year yield to find acceptance above the stiff resistance lined up at 3.041 percent.

That said, an above-forecast US retail sales (due later today) could push the 10-year yield above 3.041 percent, thus pushing the USD/JPY pair above 110.04 in a convincing manner.

USD/JPY Technical Levels

FXStreet Chief Analyst Valeria Bednarik believes a sudden appreciation in T-yields could push the USD/JPY pair above the key hurdle of 110.00.

Support levels: 109.00 108.70 108.20

Resistance levels: 110.00 110.40 110.85