The currency pair USDJPY, currently at 141.854, is rising close to the 142.00 level due to a strong US Dollar performance in a market characterized by caution.

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• USD/JPY jumps to near 142.00 as the US Dollar rallies amid a cautious market mood.

The pair currently trades last at 141.854.

The previous day high was 140.5 while the previous day low was 139.11. The daily 38.2% Fib levels comes at 139.97, expected to provide support. Similarly, the daily 61.8% fib level is at 139.64, expected to provide support.

The USD/JPY pair is swiftly marching towards the critical resistance of 142.00 in the European session. The asset has shifted into a bullish trajectory amid strength in the US Dollar Index (DXY) and rising odds of an unchanged interest rate decision by the Bank of Japan (BoJ), which will be announced on July 28.

S&P500 futures have added decent gains in London, portraying ease in the overall risk-off mood. US equities were heavily sold on Wednesday, driven by an intense sell-off in technology stocks. Investors are cautious that guidance from tech-savvy stocks could remain weak amid higher interest rates by the Federal Reserve (Fed).

The rally in USD/JPY is backed by expectations that policy divergence between the Fed and the Bank of Japan (BoJ) would escalate further as the Fed is expected to raise interest rates further while the BoJ will continue maintaining its decade-long ultra-dovish policy stance. The context has sent the Japanese Yen sharply lower against the US Dollar.

Reuters reported on Friday that the BoJ was leaning toward maintaining its yield curve control (YCC) strategy at next week’s policy meeting. “Inflation is accelerating more than expected. But the key is whether the increase is sustainable, which will depend largely on corporate profits and next year’s wage outlook,” one of the sources told Reuters.

The US Dollar Index has climbed to near the immediate resistance of 101.00 as investors are pumping money into safe-haven assets, knowing the fact that more interest rate hikes by the Fed would deepen fears of recession. Contrary, the 10-year US Treasury yields have dropped to near 3.84%.

Technical Levels: Supports and Resistances

USDJPY currently trading at 141.92 at the time of writing. Pair opened at 140.08 and is trading with a change of 1.31 % .

The pair is trading below its 20 Daily moving average @ 141.96, above its 50 Daily moving average @ 140.51 , above its 100 Daily moving average @ 137.14 and above its 200 Daily moving average @ 136.95

The previous day high was 140.5 while the previous day low was 139.11. The daily 38.2% Fib levels comes at 139.97, expected to provide support. Similarly, the daily 61.8% fib level is at 139.64, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 139.29, 138.51, 137.91
• Pivot resistance is noted at 140.68, 141.28, 142.07

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