The USD/JPY pair traded with a positive bias through the early North American session and was last seen trading around the 113.65-70 region, or a one-week high set earlier this Tuesday.

A combination of supporting factors assisted the USD/JPY pair to build on the previous day's positive move and gain some follow-through traction for the second successive day on Tuesday. Easing concerns about the economic fallout from the new Omicron variant remained supportive of the prevalent risk-on environment. This, in turn, undermined the safe-haven Japanese yen and acted as a tailwind for the major. 

Bulls further took cues from a further recovery in the US Treasury bond yields, though a subdued US dollar price action might keep a lid on any further gains for the USD/JPY pair. The fundamental backdrop, however, favours bulls and supports prospects for a further near-term appreciating move.

BULLISH AND BEARISH CONDITIONS / POSSIBILITIES :

By the middle of Tuesday's European trading hours, the currency exchange rate had reached the 113.75 level. Meanwhile, it was spotted that the rate mostly ignored the close-by weekly R1 simple pivot point at 113.69 and the 200-hour simple moving average near 113.60.

In the case that the rate declines, it could look for support in the 50-hour simple moving average near 113.30. Below the 50-hour SMA, the 100-hour simple moving average might act as support near 113.20. Further below, note the weekly simple pivot point at 113.11. Although the previous resistance line from March restricts short-term downside around 112.50, 20-DMA surrounding 114.00 guards short-term upside of the USD/JPY prices. 

Strong Resistance Prevails At 114.60

Dec 07 2021

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