USD/JPY Price Analysis: Rejected at 133.00 but remains firm at around 132.40s

• USD/JPY advanced sharply toward 132.40 on Monday, spurred by a risk-on impulse.
• The daily chart suggests the pair as neutral-upwards biased.
• Short term, the USD/JPY 4-hour chart, depicts the pair would trade within 131.80-133.00.

The USD/JPY climbs as the New York session progresses, up by 0.77%, hitting a new six-week high at 132.90. Nevertheless, the major failed to hold to its gains and was rejected toward the  132.40 area. At the time of writing, the USD/JPY is trading at 132.44.

From a daily chart perspective, the USD/JPY climbed and pierced the last week’s high around 132.90 to retreat to 132.50s. The USD/JPY retracement was spurred by the 50-day Exponential Moving Average (EMA) At 132.66; albeit broken, the USD/JPY pair slid beneath the latter. Although the pair is trading off the day’s high, the USD/JPY bias in the near term is tilted to the upside.

Zooming into the 4-hour chart, after the USD/JPY consolidated during the last week in the 130.30-131.80 area, it broke the top of the range, but solid resistance around 133.00, capped the USD/JPY rally. Nevertheless, the USD/JPY might begin trading in a higher range, within the 131.80-133.00 area, ahead of US inflation data to be revealed on Tuesday, around 13:30 GMT

If the report shows that inflation continues to edge lower, the USD/JPY could aim toward the 200-EMA at 131.49, ahead of the 131.00 figure. Once those demand areas are cleared, the 100-EMA would be exposed at 130.84.

Conversely, higher-than-expected inflation would pave the way for further upside. Therefore, the USD/JPY first resistance would be 133.00. Break above, and the 134.00 figure is next, followed by the January 6 high at 134.77.

USD/JPY 4-hour chart

USD/JPY Key technical levels