USD/JPY tests critical daily support line near 113.70 once again amid risk-aversion

USD/JPY eyes deeper losses below 113.73 as risk-off trades remain at full steam.
The pre-Fed rebound in the US Treasury yields could save the day for bulls.
Sellers keep their sight on 100-DMA at 113.31 on the additional declines.

Dhwani Mehta FXStreet

USD/JPY is challenging the key demand area below 114.00 once again, as JPY bulls fight back control amid a risk-off market profile.

Investors run for the safe-haven yen amid escalating tensions over a potential Russian war with Ukraine, as the US readies troops alongside its NATO allies. Additionally, expectations that the Fed could surprise markets by a small rate hike this week also kept the investors on tenterhooks.

Further, tightening covid restriction in Japan due to the Omicron variant contagion underpins the local currency further.

The downside in the pair, however, could be cushioned by the repositioning in the US dollar and the Treasury yields, as they staged a decent rebound ahead of the Fed meeting.

USD/JPY: Technical outlook

USD/JPY’s daily chart shows that the price has is testing the bulls’ commitments at the two-month-old ascending trendline support at 113.73.

The spot tested the critical daily support line over the past two trading days, although managed to defend it.

Daily closing below the latter will trigger a fresh downswing towards the bullish 100-Daily Moving Average (DMA) at 113.31.

The 113.00 round level will be next on sellers’ radars, opening floors towards the November 30 lows of 112.53.

The 14-day Relative Strength Index (RSI) is pointing south below 50.00, allowing room for more declines.

USD/JPY: Daily chart

On the other side, any retracement will need to find acceptance above the 114.00 level, above which scaling the horizontal 50-DMA at 114.30 is crucial to initiate a meaningful recovery.

The next bullish target is seen at the psychological level at 114.50 should the renewed upside maintain the momentum.

USD/JPY: Additional levels to consider

USD/JPY

Overview
Today last price	113.76
Today Daily Change	-0.21
Today Daily Change %	-0.18
Today daily open	113.98

Trends
Daily SMA20	114.89
Daily SMA50	114.32
Daily SMA100	113.28
Daily SMA200	111.5

Levels
Previous Daily High	114
Previous Daily Low	113.47
Previous Weekly High	115.06
Previous Weekly Low	113.6
Previous Monthly High	115.21
Previous Monthly Low	112.56
Daily Fibonacci 38.2%	113.8
Daily Fibonacci 61.8%	113.67
Daily Pivot Point S1	113.64
Daily Pivot Point S2	113.29
Daily Pivot Point S3	113.11
Daily Pivot Point R1	114.17
Daily Pivot Point R2	114.35
Daily Pivot Point R3	114.7

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.

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