USD/JPY Price Analysis: To consolidate as a doji looms near the YTD highs around 125.70

• Despite the positive correlation with US Treasury yields, the USD/JPY consolidates in the 125.30-70 range.
• USD/JPY Price Forecast: The bias remains upwards, but a doji near the YTD highs might open the door for lower prices.

USD/JPY is almost flat as the Asian Pacific session begins, up 0.05%, but short of the YTD highs around 125.77, as Tuesday’s price action forms a doji, which means indecision looms over the pair. At the time of writing, the USD/JPY is trading at 125.48.

On Tuesday, the USD/JPY meandered around the 125.45 area but slumped sharply on the release of mixed US inflation figures, albeit hotter than expected; the numbers were not far from the expectations.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is upward biased, as depicted by the daily chart. However, a doji near the YTD highs might open the door for a correction lower.

Meanwhile, the USD/JPY 1-hour chart, depicts the pair has formed a double top, but as the USD/JPY broke above 125.35, the USD/JPY might consolidate in the 125.30-77 region.

Upwards, the USD/JPY first resistance would be 125.56. A breach of the latter would expose the confluence of the YTD high and the R1 daily pivot near the 125.77-80 area. Once cleared, the following line of defense for JPY bulls would be 126.00.

On the flip side, the USD/JPY first support would be the confluence of the 50-hour simple moving average (SMA) and the daily pivot around 125.28-30 area. A decisive break would open the door towards the S1 daily pivot at 124.81, followed by the 100-hour SMA at 124.64.

Technical levels to watch