USD/JPY analysis: trapped between stocks' rally and yields' retracement

Valeria Bednarik FXStreet

USD/JPY Current price: 113.86

The USD/JPY pair extending its consolidative phase around the 114.00 level, unable to react to worldwide stocks, with European benchmarks establishing fresh yearly highs and Wall Street running to all-time records. Yields, however, fell this Wednesday, with the 10-year note benchmark at 2.35% from Tuesday's 2.39%, putting the pair up against the top. The pair has drawn a potential double top around 114.80, but remains above the neckline of the figure, which stands at 112.86, December 4th low. The figure has a 200 pips' height, establishing a probable bearish target at 110.80 in the case of a bearish breakout. In the short term, the 1 hour chart shows that the price is trading between its 100 and 200 SMAs, bottoming around this last for the day at 113.41, while technical indicators have recovered from near oversold readings, but turned flat within negative territory. The 100 SMA in the mentioned time frame stands flat around 114.00, converging with the 23.6% retracement of the 2011/15 rally. In the 4 hours chart, the price is well above a bullish 100 SMA, the Momentum indicator heads modestly lower below its mid-line, and the RSI turned higher, now around 51, failing to provide clear clues on what's next for the pair.

Support levels: 113.60 113.15 112.80

Resistance levels: 114.20 114.55 114.90

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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