The USDJPY pair was trading slightly lower on Friday and correcting Thursday’s gain as sentiment worsened slightly during the London session. Thus, the USDJPY pair was down by 0.20 per cent and changing hands near 113.85.
The critical resistance now stands at 114.40/50, where the pair has failed multiple times already and a steep sell-off has followed every time bulls wanted to conquer this level. Therefore, a big battle might be expected for this level again. If the price jumps above, large stop losses could be hit, and the greenback could rocket further higher after this, with the next medium-term target at 118.00.
On the other hand, should this resistance hold once more, the yen might strengthen quickly, with the first support at 113.55 and if it is not held, further decline to 113.00 could occur. As long as the pair trades above 112.40 and above the 100-day moving average near 111.80, the outlook could still remain bullish.
The USDJPY pair is driven mostly by the rising US yields, which continue to march higher due to the Fed rising rates, which is expected to continue over the next quarters.
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