USD/JPY applies pressure on 114.00 handle

By FXStreet USD/JPY has been trading steadily higher during the Asian trade, tracking the surging Nikkei 225, which rose by over 7.5%, bolstered by improved global sentiment, odds of further easing action by the Bank of Japan increasing, and bargain hunting.

USD/JPY moved from a session low of 113.30 at the beginning of Tokyo trade all the way to top out at 114.00 round number, currently being re-tested.

Nikkei 225 on fire

A disappointing Japanese Q4 GDP, which suggests further BOJ action to stimulate the slowing economy is needed, gave an additional boost to the benchmark index, allowing to recover over 1,000 points of recent lost ground. Despite the rise in the Nikkei 225, the structure is still bearish, with lower lows and lower highs printed on the daily.

USD/JPY technicals

Despite the rise, Valeria Bednarik, Chief Analyst at FXStreet, notes: “The pair’s advance seems barely corrective and the risk remains towards the downside, as in the daily chart, the technical indicators have stalled their sharp declines, but remain in extreme oversold territory, not yet confirming further recoveries.”

“In the 4h chart, indicators have also corrected oversold readings, but the RSI indicator has lost its upward strength around 44, whilst the price develops well below its …read more

Source:: FX Street