USD/JPY has risen more than 5% since the beginning of the year. The main reason is the prospect of further divergence between the monetary policy trajectories of the Fed and the Bank of Japan. The weakening of the yen is also facilitated by the events in Ukraine, where Russia is conducting a military special operation, and inflation accelerated in Japan against the backdrop of a sharp rise in energy prices (Japan is the largest net importer of them).
However, due to the sharp weakening of the dollar in the previous two days, the USD/JPY pair has declined, reaching an important short-term support level of 121.56 by now. In case of its breakdown, the correctional decline of USD/JPY may continue, but it will most likely be limited by the support levels of 118.47, 117.60.
The most likely rebound from the support level of 121.56 and the resumption of growth. A breakdown of the local resistance level of 122.43 will be a signal to resume buys.
In an alternative scenario and after the breakdown of the local support level of 121.30 USD/JPY will head towards support levels 118.47, 117.60. A deeper decline in the current situation is unlikely.
Support levels: 121.56, 121.30, 118.47, 117.60, 116.00, 114.90, 114.40, 113.90, 113.10, 112.20, 110.15
Resistance levels: 122.43, 123.00, 124.00, 125.00, 125.65
*) See also “Technical analysis and trading recommendations” -> Telegram
**) Get no deposit StartUp bonus up to 1500.00 USD
