USD/JPY cracks 114.00 amid USD weakness and bearish wedge
|- USD/JPY eyes deeper losses below 114.00 on DXY weakness.
- US Treasury yields attempt a bounce ahead of Retail Sales.
- Bearish wedge confirmation and daily close below 50-DMA cheer bears.
USD/JPY is flirting with three-week lows, losing the 114.00 level amid persistent weakness in the US dollar against its main peers and a technical breakdown on the daily sticks.
The slump in the greenback that ensued after the 40-year US high inflation numbers triggered “sell the news” in the dollar. The US currency continues to bear the brunt of the view that the real return is higher in Emerging Markets (EM).
Despite the renewed uptick in the US Treasury yields, USD/JPY bears remain unimpressed, at the time of writing, as traders refrain from creating any fresh positions in the major ahead of the key US Retail Sales release.
Additionally, the risk-off trading in the global indices offers support to the safe-haven yen, collaborating with the downside in the pair. Aggressive Fed’s tightening expectations spurred by hawkish Fedspeak weigh on the risk-sensitive equity markets worldwide.
USD/JPY: Technical outlook
USD/JPY’s daily chart shows that the price has confirmed a rising wedge breakdown after closing Thursday below the ascending trendline support at 114.23. At that level, the mildly bullish 50-Daily Moving Average (DMA) also coincided.
The bearish wedge opens floors for additional losses towards the upward-sloping 100-DMA at 113.01. Ahead of that, the December 20 low of 113.32.
The 14-day Relative Strength Index (RSI) is pointing south below 50.00, allowing room for more declines.
USD/JPY: Daily chart
Any retracement will need acceptance above the aforesaid critical support now resistance at 114.23.
The next bullish target is seen at the 21-DMA of 114.82 on the road to recovery should 114.50 get cleared on a sustained basis.
USD/JPY: Additional levels to consider
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.