• USD/JPY bounces to around 115.50 after defending 115.00.
  • Russia-Ukraine geopolitical risks continue to remain a threat.
  • Downside appears cushioned amid a bunch of healthy support levels.

USD/JPY is consolidating Friday’s sell-off around mid-115.00s, trying to find the conviction to extend the recovery momentum.

Even though the risk sentiment has somewhat recovered, worries over a potential Russia-Ukraine war persist, which keeps any renewed upside in the US Treasury yields limited. This, in turn, could stem USD/JPY’s rebound.

Bulls may also find comfort from an increasing case for rising global rates, as inflation soar worldwide. The January Fed meeting’s minutes are likely to ramp up expectations for aggressive tightening by the world’s most powerful central bank.

Meanwhile, the Bank of Japan (BOJ) successfully defended its key bond yield target on Monday, as attention turns towards the Japanese growth numbers due on Tuesday.

In the meantime, the speech from St. Louis President James Bullard will be closely eyed for fresh hints on the Fed’s rate hike plans.

USD/JPY: Technical outlook

USD/JPY’s daily chart shows that the price found buyers well above the bullish 21-Daily Moving Average (DMA) at 114.79.

Also, bulls remain hopeful as the spot managed to defend the 115.00 level, as the 14-day Relative Strength Index (RSI) continues to hold above the midline.

On the upside, daily closing above 116.00 is needed to retest Friday’s high of 116.17, above which the critical horizontal trendline resistance at 116.34 will come into play.

USD/JPY: Daily chart

USD/JPY: Additional levels to consider

This article was originally published by Fxstreet.com.Read the original article here.

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