- Market sentiment is bearish as the war between Ukraine and Russia escalates as Western countries impose harsh sanctions on Russia.
- The US dollar index rises 0.20%, while US Treasury yields fall.
- USD/JPY Technical Outlook: Despite the drop on the day, the pair is biased to the upside and could touch the yearly high at 116.35 in the near term.
Financial markets’ risk appetite on Monday was clouded by growing concerns over the Ukraine-Russia conflict that escalated on Saturday, amid Western countries imposing strict sanctions on Russia, some of its government officials and Russian oligarchs linked to the Vladimir Putin regime. . At the time of writing, the USD/JPY is trading at 115.07.
Meanwhile, US Treasury yields are closely correlated to USD/JPY price action. The 10-year US Treasury bond yield falls eleven basis points, from 1.927% to 1.873%, a headwind for USD/JPY. The dollar, sought after as a safe-haven asset, rises as the US Dollar Index, which measures the value of the dollar against a basket of rivals, stands at 96.81, up 0.20%.
Earlier in the Asian session, USD/JPY posted its daily high at 115.77, followed by a drop to the daily low of 114.97 in the last two hours, followed by a sudden jump above the 115.00 mark.
USD/JPY Price Forecast: Technical Outlook
USD/JPY is biased to the upside as shown by the daily chart and its moving averages (DMA) located above the spot price, pointing to the upside as shown by the upside slope. It is worth noting that USD/JPY jumped off the 50-day moving average (DMA) at 114.94, and if it manages to make a daily close above the Feb 25 low of 115.14, it could open the door for more gains.
Therefore, the first resistance for USD/JPY would be the daily high of Feb 25 at 115.75. A break of the latter would expose the 116.00 level, followed by the yearly high at 116.35.
Additional technical levels
Source: Fx Street