USD/JPY is approaching key resistance levels just above 114.00
Risk is holding up decently so far today with E-minis now up by 0.2 and Asian equities continuing to trade higher as we close out the session. Oil prices are also surging with WTI up by 1.5% to $52.35 currently. The mood is helping to keep yen pairs underpinned and for USD/JPY, price is looking towards the 114.00 handle ahead of European trading.
When looking at the daily chart, price is closing back in on a test of the 114.00 level and key resistance levels above it. Of note, the resistance level @ 114.50 from the 23.6 retracement level is the key one to watch out for.
Since May 2017, that has been the ceiling price for USD/JPY and the latest run in October this year also failed to eclipse that level before price fell back down again. With the key event for risk this week being the Trump-Xi summit, only a trade truce there will see risk assets rally further and possibly trigger a break of the 114.50 handle in USD/JPY.
Otherwise, expect that level to remain a cap for the pair in the sessions to come once again. For today, there are large expiries sitting at 114.00 that will help to limit gains in the pair with exporters reportedly loading up on offers between the 114.00 to 114.50 handle. Hence, unless there is a strong shift in fundamentals/risk, the region just above 114.00 will remain a key resistance level for the pair.