- The US dollar maintains recent gains after US CPI data.
- US holiday, bond market closed.
- USD / JPY recovers critical technical level above 113.40.
The USD/JPY it is moving sideways on Thursday in neutral territory near 114.00. It previously rose to 114.17, reaching the highest level in a week, and then retraced. The pair is holding on to Wednesday’s gains as it rose from below 113.00 to 114.00.
The rally in the US dollar across the board and the rise in US yields boosted the USD / JPY. The US bond market is closed on Thursday due to a US holiday. If the decline in Treasuries continues, the pair could extend the gains. The moves were triggered by higher than expected inflation readings in the US.
Short term outlook
USD / JPY has returned to the previous range between 113.40 and 114.40. The recovery above 113.40 eased the downward pressure. On the upside, the pair faces a strong barrier around 114.20 / 40. A consolidation above should clear the way for more gains and a test of the yearly highs near 114.70.
A pullback below 113.30 should again weaken USD / JPY, favoring a downward correction. The next support is at 113.00 followed by the weekly low at 112.70.
Technical levels
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