Not much standing in the way of USD/JPY hitting 115.00 and beyond

Technical Analysis

Author: Adam Button | usdjpy

Fed chair decision was the last significant impediment

Fed chair decision was the last significant impediment
Today's dip in equities has been bought once again and it's tough to see that paradigm coming to an end in the final weeks of the year. It's a time that's the most-bullish on the calendar and that should be a tailwind for USD/JPY.

On the fundamental side, Powell's re-nomination eliminates a USD downside risk while the upside risks from inflation remain in place. Another tailed 5-year auction today means rates are also unimpeded to the upside with 5s hitting the highest levels since the pandemic.

Technically, this is all shown in USD/JPY, which is testing last week's high and a series of highs in the 115.00 range and stretching up to 115.50. We've had a period of consolidation in Oct-Nov and so the overbought conditions have also been relieved.

I don't see much standing in the way of 118.00, a level that was last reached in December (not a coincidence) of 2016.

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