Today we will talk about treasury bonds (10Y US Notes) compared to negatively correlated USDJPY currency pair, as we see some interesting reversals.

The 10Y US Notes (treasury bonds) is in a massive decline in the last couple of months and this is the reason why USDJPY is so high. However, looking at the 4-hour chart, we can now see that 10Y US Notes is in strong recovery mode, which has just caused a reversal down on USDJPY pair after both assets completed five-wave cycle from Elliott wave perspective.

Well, from a technical point of view, we believe that 10Y US Notes may face even bigger recovery, at least up 120'30 level, which will most likely push USDJPY at least back to the former wave (4) support and 131.50 area, if not even deeper, if stocks start recovering, down to a higher degree wave 4 and 126.30 support zone.