Poised to challenge the 110.00 threshold

USD/JPY Current price: 109.62

  • Japan’s Tokyo inflation remained subdued in March, printing at -0.2% YoY.
  • Wall Street posted substantial gains, while US Treasury yields ticked higher.
  • USD/JPY trades near its yearly high and could keep advancing in the near-term.

The USD/JPY pair hit 109.84 on Friday, its highest since May 2020, ending the week a handful of pips below the level. European equities closed in the green, reversing early losses, while Wall Street posted substantial gains, underpinning the pair. Also, US Treasury yields ticked higher, with that on the 10-year note settling at 1.67%, reflecting a better market mood.

Japan published March Tokyo inflation figures on Friday. The annual Consumer Price Index printed at -0.2%, below the 0% expected, while the core reading, which excludes fresh food and energy prices, improved from 0.2% to 0.3% YoY. At the weekly opening, the Bank of Japan will publish the Summary of Opinions.

USD/JPY short-term technical outlook

The USD/JPY pair is bullish, according to the daily chart, as it advanced further above a bullish 20 SMA while the longer ones remain far below the current level. The Momentum indicator is stable within positive levels while the RSI advances within overbought readings, without signs of upward exhaustion. In the 4-hour chart, all moving averages head north below the current level, while technical indicators stabilized in overbought levels. As long as the pair remains above the 109.00 price zone, it has chances of breaking beyond the 110.00 mark.

Support levels: 109.40 108.95 108.50

Resistance levels: 109.85 110.10 110.50

View Live Chart for the USD/JPY

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