- Broad US dollar weakness in general weighed on the USD/JPY pair.
- Falling US Treasury yields and demand for riskier assets keep USD/JPY dovish.
- USD/JPY Technical Outlook: Remains biased to the upside ahead of US CPI for January.
On Wednesday, the USD/JPY retraces from weekly highs before the release of US inflation figures, coupled with falling US Treasury yields. At time of writing, USD/JPY is trading at 115.44, down 0.08%.
The mood in financial markets is positive, as evidenced by gains in European and US stock indices. The 10-year US Treasury yield is falling three basis points to 1.925%, while the US Dollar Index is down 0.20%, currently at 95.44.
USD/JPY Price Forecast: Technical Outlook
In the overnight session for North American traders, the pair hit a daily high at 115.68, followed by a drop to the one-month downward sloping support/resistance trend line passing around the 115.25-35 area. Even though USD/JPY retraced to the aforementioned trend line, the pair remained above it, confirming the bullish bias.
That said, the first resistance for USD/JPY would be 116.00. The break of the latter could pave the way for further gains and expose a 24-year downtrend line drawn since August 1998, swinging highs passing around 117.00. A break to the upside would expose the January 2017 high at 118.61.
Additional technical levels
Source: Fx Street
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