- The USD/JPY extends its weekly gains, so far up 0.80%.
- The US and the UK’s banning of Russian oil dented the market mood.
- USD/JPY Technical Outlook: An upward break of the triple’s bottom neckline might open the door towards a new YTD high.
The USD/JPY climbs for the second straight day, once the Asian Pacific session is about to begin, following a busy day in the markets. A risk-off market mood in Wall Street seems to influence Asian equity futures, pointing to a lower open. At the time of writing, the USD/JPY is trading at 115.66.
Geopolitical headlines keep market volatility high and investors on their toes. Russia’s attacks continued in the regions of Mykolayiv and Kharkiv. A Ukrainian presidential adviser said that the troops repulsed Russian attacks at both cities, while Moscow reported cease-fire in Ukrainian corridors. In the meantime, the US and UK imposed another tranche of sanctions on Russia. Both countries banned imports of Russian oil, which could spark another leg-up in the overextended oil rally.
Meanwhile, the greenback was trading softer, except for the JPY. The US Dollar Index, a gauge of the greenback’s value against a basket of rivals, fell some 0.15%, though clung to the 99.000 mark. Contrarily, the US 10-year T-note yield, which positively correlates with the USD/JPY, rose seven and a half basis points, up at 1.85%, underpinning the USD/JPY.
Data-wise, the US economic docket featured the Trade Balance, which printed a deficit, while Imports increased and Exports came short than expected.
Wednesday’s economic docket would feature some data which could offer a fresh impetus for USD/JPY traders. The Japanese docket would reveal Gross Domestic Product related figures for Q4 2021. Across the pond, the US economic docket would unveil US JOLTs Openings while market participants wait for inflation figures to be released by Thursday.
USD/JPY Price Forecast: Technical outlook
The USD/JPY is still upward biased, though it is worth noting that the daily moving averages (DMAs), which were previously well below the spot, are getting closer to the actual price.
Monday’s price action pierced and achieved a daily close above the 50-DMA, which sits at 115.05, opening the door for a renewed test of the triple-bottom neckline around 115.80.
The USD/JPY first resistance would be the latter. Once cleared, the next resistance would be 116.00, followed by the YTD high at 116.35 and the triple-top target at 117.00.
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