The USD/JPY pair kicks off the new week on a positive note and builds on Friday's goodish rebound from a one-week low, around the 129.80 region. The Japanese Yen (JPY) is undermined by dovish remarks by the possible Bank of Japan (BoJ) governor candidate Kazuo Ueda, backing the current policy stance and the need to continue with monetary easing. The comments dampened the prospects for a hawkish twist from the BoJ, which, along with sustained US Dollar buying interest, act as a tailwind for the major.

From a technical perspective, acceptance above the 132.00 mark might have already set the stage for additional gains. That said, any subsequent move up is more likely to confront some supply near last week's swing high, around the 132.90 region. Some follow-through buying beyond the 133.00 round figure will be seen as a fresh trigger for bulls and lift the USD/JPY pair to the 133.45-133.50 intermediate hurdle. The momentum could get extended towards the 134.00 mark en route to the 134.50 resistance and the YTD peak, around the 134.75-134.80 region touched on January 6.

On the flip side, any meaningful slide back below the 132.00 mark now seems to find decent support near the Asian session low, around the 131.20 region. This is closely followed by the 131.00 round figure, which if broken decisively could prompt some technical selling. The USD/JPY pair might then turn vulnerable to accelerate the fall towards the 130.00 psychological mark. A convincing break below the latter will negate any positive bias and shift the near-term bias in favour of bearish traders.

USDJPY long term bullish after breakout above 132.86-133.0

Feb 13 2023