Daily Analysis USDJPY - 24 May 2023

A further rise in the US bond yields, meanwhile, widens the US-Japan rate differential and drives flow away from the Japanese Yen (JPY). Furthermore, the Bank of Japan's (BoJ) more dovish stance weakens the JPY and reinforces the positive near-term outlook for the USD/JPY pair. That said, a more cautious market sentiment due to concerns about slowing global economic growth provides some support for the safe-haven JPY and limits further upside potential for the USD/JPY pair.

The recent breakout through the very important 200-day Simple Moving Average (SMA) and a subsequent move beyond the previous YTD peak favor bullish traders. When looking at the 1-day chart, the currency pair has consistently respected the strong resistance level of 138.70 in the last four instances. If the pair successfully breaks above this level, it is expected to move toward the next resistance level at 142.2. However, if a correction occurs, the next support level is likely to be around 136.00. Given that the pair has experienced six consecutive days of gains, a correction appears probable in the near term.

Resi Level 3	Resi Level 2	Resi Level 1	Suppo level 1	Suppo level 2	Suppo level 3
140.00	139.50	138.70	137.70	136.50	135.50