USD/JPY analysis: bullish, re-test of 114.40 likely

Valeria Bednarik FXStreet

USD/JPY Current price: 113.46

Sentiment, through yields, keeps leading the way of USD/JPY.
USD/JPY heading towards 114.40, but additional gains not yet seen.

The USD/JPY pair jumped to a 3-week high in the last trading day of the week, hitting 113.58 ahead of the Nonfarm Payroll report, and holding nearby at the end of the day, despite the noise that came from US data. The rally was a result of rallying equities and yields, as the Nikkei rallied over 300 points for a second consecutive day, with worldwide equities closing with gains in the last day of the week and US Treasury yields recovering from early weekly losses, with the 10-year note yield up to 2.38% from the previous 2.32%. The pair is biased now higher according to technical readings in the daily chart, as it settled well above its 100 and 200 DMAs that anyway remain within a well-limited range in the 111.40/70 region, while the Momentum indicator heads up almost vertically, as the RSI presents a modest upward strength, but stands anyway at 58. Shorter term, and according to the 4 hours chart, technical indicators lost upward strength within overbought territory, but as the price settled above its 100 and 200 SMAs and near its weekly high, the risk of a downward movement seems limited. Further gains beyond the mentioned high will likely result in a test of the 114.40 region, a major long-term static resistance level.

Support levels: 113.10 112.70 112.30

Resistance levels: 113.65 114.00 114.40

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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