- USD/JPY is up 0.38% on the week as demand for safe-haven currencies increases.
- USD/JPY tumbled on Putin’s ‘special military operation’ headline but is paring earlier losses.
- USD/JPY Technical Outlook: Bullish bias on the daily and 1 hour chart, but higher volatility levels suggest following the markets in the short term, caution is warranted.
The USD/JPY up sharply from daily lows around 114.40 to 115.30 highs amid Russian invasion of Ukraine, which began on Thursday during the Asian session. That said, the mood of investors deteriorated as increased flows through pairs safe haven. At the time of writing, USD / JPY is trading at 115.39.
During the Asian session, the UN organized an emergency security council meeting. Around that time, Russian President Putin released a speech in which he announced a “special military operation” in Ukraine, with the goal of denazifying and demilitarizing the country.
market reaction
USD/JPY’s initial reaction to the news was to the downside, with the pair plummeting 70 pips and breaking the 50-day moving average (DMA) at 114.87 on its way down and hitting a daily low at 114.40. Once European traders got to their offices, the pair recouped its losses and then some, trading near the daily highs of Feb 23 at 115.20.
USD/JPY Price Forecast: Technical Outlook
USD/JPY is biased to the upside as the daily chart shows from a technical perspective. The daily moving averages (DMA) are below the spot price, although it faces resistance around 115.52, the 24 Nov 2021 daily high.
Due to geopolitical events, it is suggested to adopt a short-term approach amid high levels of volatility observed in the financial markets. That said, Figure 1 hour USD / JPY has a bullish bias, and USD / JPY inclined towards the daily maximum Feb. 22 in 115.24 as a support. If the pair manages a daily close above it, a move towards 116.00 and the maximum annual 116.30 area it is in the cards.
To the upside, the pair’s first resistance would be the Feb 17 daily high at 115.53, followed by the Feb 16 cycle high at 115.79 and the Feb 15 high at 115.82. On the other hand, the first support of the USD/JPY would be the daily resistance of February 22 that turned into support at 115.23. A break of the latter would expose the 200 hourly simple moving average (SMA) at 115.18, followed by the confluence of the 50, 100 hourly SMAs at 114.97 and 114.93, respectively.
Additional technical levels
Source: Fx Street
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