Market news

22 December 2021

USD/JPY Price Analysis: Reclaims 114.00 amid falling US bond yields

  • The USD/JPY advances some 0.10% amid a risk-on market mood.
  • USD/JPY Technical Outlook: Tilted to the upside as USD bulls have reclaimed the 114.00 figure now eyeing 115.00.

The USD/JPY barely advance during the New York session, trading at 114.19 at the time of writing. US equities remain tilted to the upside, reflecting market participants’ mood to the detriment of safe-haven assets. In the FX market, risk-sensitive currencies rise while safe-haven statuses like the USD and the CHF advance against the low-yielder Japanese yen.

The US Dollar Index, which tracks the greenback’s value against a basket of its peers, slumps 0.35%, sitting at 96.14, clinging with its nails to the 96.00 threshold. In the meantime, the US 10-year Treasury yield drops three basis points, down to 1.458%.

USD/JPY Price Forecast: Technical outlook

In the overnight session, the USD/JPY pair slide slightly towards the daily low aright at the central daily pivot at 113.95. As market sentiment improved, the US dollar strengthened versus the yen, surging towards the R1 daily pivot at 114.34 before settling down at current levels.

The USD/JPY daily chart shows that the pair has an upward bias. The daily moving averages (DMAs) remain under the spot price, with the 50-DMA at 113.86, the closest to the current price action. Additionally, a four-month-old upslope trendline, respected two times, intersects with the aforementioned DMA, leaving the 113.80-90 area as a problematic demand zone to overcome for JPY bulls.

To the upside, the first resistance would be November’s 1 daily high at 114.44. A breach of the latter could send USD/JPY rallying towards October’s pivot high at 114.70, followed by the 115.00 threshold.

On the other hand, the 114.00 figure would be the first line of defense for USD bulls. Once the aforementioned level is breached, the next stop would be the 50-DMA at 113.86, immediately followed by December’s 17 daily low at 113.14.

 

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