USD/JPY analysis: bullish breakout aims to 113.38

Valeria Bednarik FXStreet

USD/JPY Current price: 112.87

USD/JPY broke a small pennant, indicating further gains ahead.
USD up on Powell's words, stocks and yields had little influence on the pair.

The USD/JPY finally found some interest and broke higher, reaching a fresh high since last January at 112.90 and trading not far below the level. The greenback enjoyed from a renewed demand following Fed's Powell positive outlook of the economy, and the confident stance on inflation before a Senate special committee. Meanwhile, equities trade in the green, although there are no fireworks there, while US Treasury yields hold steady around their weekly highs, with the 10-year note yield at 2.86%. There won't be macroeconomic releases in Japan this Wednesday. The pair broke the small pennant that contained the price for almost a week, confirming additional gains ahead, headed probably toward 113.38, the yearly high set at the beginning of the year. In the 4 hours chart, technical indicators regained the upside, with the Momentum indicator heading north well above its mid-line and the RSI partially losing upward strength around 71. In the mentioned chart, moving averages are finally gaining upward traction, although far below the current level to be relevant in the near term. Pullbacks should remain contained around 112.60 to keep the positive tone alive, while above the 113.00 level, the mentioned yearly high is the main resistance/bullish target.

Support levels: 112.60 112.15 111.80

Resistance levels: 113.00 113.40 113.85

View Live Chart for the USD/JPY

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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