USD/JPY closes into 114.00, trimming Monday’s gains

  • The greenback slides against the Japanese yen, despite a mixed market mood.
  • Some 8,500 American troops were put under high alert, attributed to the escalation of the Russia – Ukraine conflict.
  • USD/JPY is upward biased despite breaking under the 50-DMA, though the longer time-frame ones remain under the spot price.

In the North American session, the USD/JPY extend its advance for two consecutive days, closing to the 114.00 psychological level. At the time of writing, the USD/JPY is trading at 113.90.

Eastern Europe conflict and FOMC meeting, spurred a risk-off market mood

The market sentiment is mixed as European equities trade in the green and the US stock indices post losses. Factors like the Ukraine – Russia conflict and the US central bank signaling the possibility of hiking rates in the March FOMC meeting.

Today, the Federal Reserve will begin its two-day monetary policy meeting, which will be watched closely by market participants, as they assess the central bank’s timeline for hiking rates and the forward guidance regarding Quantitative Tightening (QT).

Regarding the eastern Europ conflict, “the US Department of Defense in Washington said about 8,500 American troops were put on heightened alert and were awaiting orders to deploy to the region if Russia invade Ukraine,” according to Reuters.

In the meantime, the US 10-year Treasury yield declines two basis points, sitting at 1.752%, weighs on the USD/JPY. The US Dollar Index, a measurement of the greenback’s performance against a basket of six rivals, advances 0.28% sits at 96.182.

The US economic docket featured the CB Consumer Confidence decreased to 113.8 from 115.2 December’s reading, revised down. The market expected a reading of 111.2.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is upward biased; despite breaking under the 50-day moving average (DMA) on January 20. The pair broke below the aforementioned, finishing the day at 114.07. That said, the USD/JPY has been unable to reclaim the level, though it fell 15-pips short of reaching it during the day.

To the upside, the USD/JPY first resistance would be the 114.00 figure. The breach of the latter would expose the 50-DMA at 114.28, followed by the January 18 daily high at 115.06.

Contrarily, the first support would be 113.67. A break under that level would expose the January 24 daily low at 113.47, followed by the 100-DMA that could sponsor a recovery for USD bulls at 113.29.

FX

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