USD/JPY Price Analysis: Bulls remain hopeful while above critical 21-DMA
- USD/JPY jumps back on the bids in tandem with the US Treasury yields.
- 21-DMA is the level to beat for the bears, as risk-off mood lifts the USD.
- RSI inches higher above the midline, more upside remains likely?
USD/JPY is trading above 114.00, looking to recover from Friday’s sell-off to weekly lows of 113.58, as the US Treasury yields rebound across the curve ahead of this week’s Fed minutes.
Expectations that the Fed could offer hints on the timing of a rate hike fuel a renewed upside in the yields, in turn, benefiting the US dollar. The greenback also takes advantage of the prevalent risk-off market profile, courtesy of the concerns about European COVID-19 curbs.
Meanwhile, investors digest the latest comments from Japan on a potential oil reserves release. The broader market sentiment is expected to lead the way going forward.
USD/JPY’s daily chart shows that the price has managed to recapture the critical horizontal 21-Daily Moving Average (DMA) at 113.89.
On Friday, the major briefly dipped below the aforementioned but managed to mark a daily close above it, keeping the buyers hopeful.
Meanwhile, the Relative Strength Index (RSI) is inching higher above the midline, suggesting that the recent uptick could likely extend in the session ahead.
USD/JPY: Daily chart
A daily closing below the 21-DMA could trigger a fresh downswing towards Friday’s low, below which a run south towards the 113.00 cannot be ruled out.
Further down, an upward-sloping 50-DMA at 112.66 will then challenge the bullish commitment.
USD/JPY: Additional levels to consider
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
