After hitting our 105 resistance target yesterday, the USD/JPY looks set to build on the bullish momentum as we approach the 200-day moving average around 105.40 / 105.60 which has not been breached since April 2020. Since mid-January, the pair has been supported by rising U.S. Treasury yields which are helping to widen the spread between U.S. Government bonds and Japanese Government bonds, making the U.S. Dollar a more attractive asset. Nevertheless, we suspect that the 105.60 resistance level will act as strong resistance as the RSI has almost reached extreme overbought territory.
Support: 105 / 104.80
Resistance: 105.40 / 105.60
