- USD / JPY remains stable around 114.20, awaiting a new catalyst.
- USD / JPY is holding onto gains, despite dollar weakness across the board.
- From a technical perspective, USD / JPY is consolidating before making a move towards 115.00.
- USD / JPY poised to head above 115.00 amidst energy crisis – ING
The USD/JPY it barely rises during the American session, up 0.02%, trading at 114.22 at the time of writing. Despite slower-than-expected economic growth in China, expectations of higher inflation and central banks reducing the COVID-19 stimulus plan, the market mood is in risk appetite mode.
Despite a weaker US dollar, USD / JPY remains above 114.00
The 10-year US Treasury yield is flat at press time, clinging to 1,581%, while the US dollar index, which tracks the dollar’s performance against a basket of rivals. , loses 0.02% and stands at 93.943. The Japanese yen is close to a four-year lows against the dollar, as higher yields on US Treasuries, which have been rising lately, have a strong positive correlation with the pair, prompting a rally from 110.00 to 114.46.
The US economic agenda presented industrial production data for September, which contracted 1.3% compared to a 0.2% expansion expected by analysts. Investors could largely ignore it, as market sentiment and US Treasury yields remain the main drivers for the pair.
USD / JPY Price Forecast: Technical Outlook
The daily chart shows that the USD / JPY pair could consolidate. The Relative Strength Index, a momentum indicator at 75, is at oversold levels and has been there since October 10. Despite the aforementioned, the pair was up 150 pips towards the 2021 year high at 114.46, but at press time, it fell back 30 pips, waiting for a new catalyst.
USD / JPY is within the range of 114.00 – 114.46. A break above the top of the range could pave the way for further gains, with 115.00 as the first supply zone.
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