USD/JPY cracks 114.00 amid USD weakness and bearish wedge
- USD/JPY eyes deeper losses below 114.00 on DXY weakness.
- US Treasury yields attempt a bounce ahead of Retail Sales.
- Bearish wedge confirmation and daily close below 50-DMA cheer bears.
USD/JPY is flirting with three-week lows, losing the 114.00 level amid persistent weakness in the US dollar against its main peers and a technical breakdown on the daily sticks.
The slump in the greenback that ensued after the 40-year US high inflation numbers triggered “sell the news” in the dollar. The US currency continues to bear the brunt of the view that the real return is higher in Emerging Markets (EM).
Despite the renewed uptick in the US Treasury yields, USD/JPY bears remain unimpressed, at the time of writing, as traders refrain from creating any fresh positions in the major ahead of the key US Retail Sales release.
Additionally, the risk-off trading in the global indices offers support to the safe-haven yen, collaborating with the downside in the pair. Aggressive Fed’s tightening expectations spurred by hawkish Fedspeak weigh on the risk-sensitive equity markets worldwide.
USD/JPY: Technical outlook
USD/JPY’s daily chart shows that the price has confirmed a rising wedge breakdown after closing Thursday below the ascending trendline support at 114.23. At that level, the mildly bullish 50-Daily Moving Average (DMA) also coincided.
The bearish wedge opens floors for additional losses towards the upward-sloping 100-DMA at 113.01. Ahead of that, the December 20 low of 113.32.
The 14-day Relative Strength Index (RSI) is pointing south below 50.00, allowing room for more declines.
USD/JPY: Daily chart
