USD/JPY hits four-week highs above 114.50, tests multi-year highs
16.11.2021, 15:39

USD/JPY hits four-week highs above 114.50, tests multi-year highs

  • Higher equity prices and US yields weigh on the Japanese yen.
  • US economic data released on Tuesday surpass expectations.
  • USD/JPY breaks key resistance and strengthens positive outlook.

The USD/JPY broke above 114.30 and jumped to test the multi-year high below 114.70. It peaked at 114.63, the strongest in four weeks and then pulled back modestly. The combination of higher US yields, rising equity prices and a rally of the dollar across the board keeps boosting the pair.

US economic data released on Tuesday came in above expectations (retail sales and industrial production) and boosted US yields. The 10-year Treasury reached 1.63%, before pulling back.

The economic figures show an improvement in economic activity that fuels expectations about an adjustment in Federal Reserve’s monetary policy sooner than expected. The numbers also help the greenback that is rising sharply. The DXY stands at fresh 16-month highs above 95.10, up 0.20% for the day.

USD/JPY short-term outlook

The pair trades near the multi-year high area around 114.70. While above 114.40 the bullish tone will remain intact and another test of the recent top seems likely. A break above should clear the way to more gains.

A slide back under 114.30 would put USD/JPY back into the range between 114.30 and 113.40, with an intermediate level at 113.75.

Technical levels

 

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