USD/JPY on its way to highest weekly close since mid-March

The USD/JPY pair rose above the 113 handle for the first time since March 17 on Thursday and spent the last day of the week consolidating that move. After falling to 112.08 in the NA session on USD weakness, the pair caught some fresh bids as the risk sentiment improved, and retraced its daily losses. As of writing, the pair was trading at 112.55, up 0.07% on the day.

The greenback stayed under pressure against its major rivals throughout the week, forcing the US Dollar Index to record losses on a weekly basis for the fourth week in a row. However, the JPY struggled to get the edge on the USD as it had a difficult time finding demand. Fueled by the positive earning reports and fading geopolitical concerns, the global stock indexes performed relatively well, hurting safe havens such as the JPY and Gold.

After starting the week at 111.30, the USD/JPY was gaining more than 100 pips as we approach the end of the trading week. The pair's ability to rise this week, despite the USD weakness, suggest that the risk sentiment has been the main driver of the price action. In addition, being one of the best-performing currencies of the week, the euro was able to push the EUR/JPY higher more than 200 pips for the week, supporting the USD/JPY's bullish move as well.

• EUR/JPY rises further to fresh 4-month highs, eyes 124.00

Technical outlook

The pair faces the immediate support at 112.50 (100-DMA) ahead of 11.95 (May 3 low) and 111.30 (50-DMA). To the upside, resistances are located at 113.05 (May 4 high), 113.50 (Mar. 17 high) and 114.00 (psychological level).