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.

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.