The USD/JPY pair held on to its modest intraday gains heading into the European session, albeit lacked follow-through and was last seen trading around the 114.00 mark.

The pair built on the overnight bounce from one-week lows and gained some traction during the early part of the trading action on Friday. Reports that China Evergrande made funds available for a bond coupon to a trustee account helped ease concerns about a credit crunch in China's real estate sector. This, in turn, undermined the safe-haven Japanese yen and acted as a tailwind for the USD/JPY pair.

On the other hand, the US dollar, so far, has struggled to capitalize on the previous day's goodish rebound from three-week lows. This was seen as a key factor that failed to provide any additional boost to the USD/JPY pair and capped the early uptick near the 114.20 area. The downside, however, remains cushioned amid a further widening of the US-Japanese government bond yield differential.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

During Thursday European evening hours, the pair had reached the support of the weekly simple pivot point at 113.64. Meanwhile, it was spotted that the recent decline has occurred in a rather small channel down pattern. The pattern could remain intact in the short-term future.

If the rate declines, it would test the support of the weekly simple pivot point at 113.64. Passing below the pivot point would only have the support of the mentioned channel down pattern's lower trend line.

On the other hand, a surge would first test the pattern's resistance line. Afterward, the 55 and 100-hour SMAs could act as a resistance near 114.20. Above the 114.20 level, 114.50, and 114.70 levels could provide resistance, as they have done in the recent past.

Will USDJPY Break 114.0 Again !

Oct 22 2021