The volatile market conditions for USD/JPY rose to three years high above 114.00. USD/JPY extended its one-and-a-half-month rise, gaining 0.47% during the New York session, trading at 114.21 at the time of this writing. As the US financial index rises between 0.46% and 1.12%, positive market sentiment will affect Japanese yen.
In addition, the UST-bond yield, which also helped with the USD/JPY riser. The US Treasury’s ten-year yield rose by six points to 1.577%, pushing the greenback higher against the yen.
Meanwhile, the positive macroeconomic data of the U.S. It helped the greenback. Surprisingly, retail sales in the US increased by 0.7% in September, above the 0.2% expected by economists. With the exception of cars and gas, sales had risen 0.7%, up from 0.5% last month.
In addition, the study of the University of Michigan Consumer Sentiment Index was 71.4, below investor 72.8, the second lowest study since 2011 as consumers are more concerned about current conditions and economic outlook.
USD/JPY Index: Technical Outlook
The USD/JPY has seen a 400 pips increase since October 4, when it was trading at around 110.50. The Relative Strength Index (RSI) to 75 indicates that the increase has taken place since October 11, when the RSI diverged higher indicating an upwards trend conditions, and on the same day, the 50-day moving average (DMA) crossed 100-DMA .
The first USD/JPY resistance level was on October 4, 2018 high at 114.54, a significant price level, which has failed four times in four years. The last break above this could open the way for further rise , targeting levels at January 27, 2017 high of 115.37 and January 9, 2017 high of 117.52.
On the other hand, a failure of 114.00 and the current overdose of RSI could open the door to a downward spiral. Significant support levels to be tested are October 13 high of 113.79, October 12 low 112.99 and October 8 high 112.24.