USD/JPY at critical resistance levels on solid dollar strength

Currently, USD/JPY is trading at 113.55, up 0.17% on the day, having posted a daily high at 113.66 and low at 113.19.

USD/JPY has been an impressive couple of weeks, rallying hard from 106.72 and busting through the weekly 200 sma at 108.60, then the popped 110.50 before making fresh six-month highs at key resistance levels. The Yen has been the worst performer behind the Mexican peso while the market prices in a December rate hike from the Fed.

When will the dollar hysteria end?

There are risks that the market is highly priced in, and, as analysts at Bank of Tokyo Mitsubishi have noted, there was nothing fundamentally different in the economies. A consolidation may already be in place in the DXY below the 102 handle here, therefore at risk to a fundamental and trend-stressful event coming to fruition. For example, the analysts also noted that President-elect Trump has been making a slew of policy announcements. "In particular, his comment that he will pull the US out of the TPP may affect market expectations," they explained,"However, his protectionist trade policy, especially regarding NAFTA and currency policy vis-à-vis the Chinese sovereign, may support the US dollar weakening."

USD/JPY levels

.Spot is presently trading at 113.55, and next resistance can be seen at 113.66 (Daily High), 113.72 (Weekly Classic R2), 114.28 (Daily Classic R2), 115.56 (Daily Classic R3) and 116.50 (Weekly Classic R3). Next support to the downside can be found at 113.54 (Yesterday's High), 113.40 (Daily Classic R1), 113.37 (Daily Open), 113.37 (Monthly High) and 113.37 (Weekly High).