- USD/JPY is losing 0.23% amid a mixed market mood for the week.
- DXY approaches 96.00 despite rising tensions in Ukraine.
- The Fed’s Bullard and Mester are in favor of raising rates at a faster pace.
- USD/JPY Technical Outlook: Trending up, but a daily close below the 50-day DMA would open the door towards 114.00.
The USD/JPY reversed decline as the weekend approached amid mixed market sentiment, fueled by Russia/Ukraine headlines, shedding 0.23% on the week. At the time of writing, the USD/JPY is trading at 115.00.
Market sentiment is pessimistic. Europan indices post losses, while stock futures Americans point out that Wall Street would open in negative. Meanwhile, the US Dollar Index, a gauge of the dollar’s value against a basket of its rivals, is up 0.13% to trade at 95.920. By contrast, the US 10-year Treasury yield falls three basis points, with a view to closing the week below 2% at 1.939%, capping USD/JPY.
Russia/Ukraine Update
Developments in the Russia/Ukraine conflict fluctuate between de-escalation/escalation mode in the last few hours. First, US Secretary Blinken proposed a meeting with Russian Foreign Minister Lavrov at the end of the week. However, he is conditional on Russia not invading Ukraine, the US State Department has reported. Meanwhile, clashes in eastern Ukraine continued on Friday as the OSCE has recorded 80 ceasefire violations, while Russian President Putin will oversee strategic exercises on Saturday.
USD/JPY Price Forecast: Technical Outlook
USD/JPY is pulling back from daily highs, but the 50-day moving average (DMA) at 114.77 stopped the decline. However, the pair is biased to the upside, but downside risks remain. The outcome of a daily close below the 50 DMA could see USD/JPY drop towards the Feb 2 low at 114.14.
Otherwise, the path of least resistance is up. The first resistance for USD/JPY would be the February 16 daily low at 115.35, former support turned resistance. A breach of the latter would expose the February 15 daily high at 115.86, followed by a challenge to the yearly high at 116.35.
Additional technical levels
Source: Fx Street
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