Market sentiment improved on Wednesday with global equities rebounding as easing concerns about the Omicron variant rekindled risk appetite. 

There was some action in the currency space amid the sense of positivity, resulting in dollar weakness against G10 majors. One currency that caught our attention was the Japanese Yen which held its ground despite investors turning to riskier assets. With the OPEC+ meeting around the corner and the US jobs report on Friday, it may be wise to keep a close eye on the Yen this week.

USDJPY: Wobbles above 112.80

The USDJPY looks to be balancing on shaky support around 112.80. After last Friday’s steep selloff, the currency pair has struggled to recover with bears firmly in the driving seat. 

Prices are trading below the 50-day Simple Moving Average but still above the 100-day while the MACD is in the process of crossing below zero. A strong daily close below 112.80 could encourage a decline towards 112.00 and potentially 111.50 – a level just above the 100-day Simple Moving Average. Should 112.80 prove to be reliable support, a rebound back above 113.30 and 114.00 could be on the cards. 

EURJPY: Challenges key support at 128.00

The last time the EURJPY secured a daily close below 128.00 was back in February 2021.

While this is major support has warded off bears on numerous occasions, the technicals remain in a favour of further downside. Prices are trading well below the 50, 100, and 200-day Simple Moving Average while the MACD trades below zero. A solid daily and weekly close below 128.00 could open the doors towards 127.40 and 126.00. Alternatively, a rebound from 128.00 may result in a sharp move towards 129.50.

GBPJPY: Approaches major support 

Just taking a glance at the GBPJPY, one can see the currency pair is under pressure on the daily charts.

Since hitting levels not seen in over 5 years back in October at 158.19, prices have been on a slippery decline, bringing bears back into the picture. The sharp decline last Friday has added fuel to the fire with prices approaching major support at 149.00. A strong breakdown below this level could open the doors towards 147.70 and 146.00, respectively. Should 149.00 prove to be solid support, a move towards 151.00 could be a possibility. 

AUDJPY: All eyes on 80.00

How prices behave around 80.00 will determine whether the AUDJPY tumbles lower or experiences a sharp rebound. Prices remain bearish on the daily charts with some pressure building close to the 80.00 support level. A strong break below this support could trigger a decline towards 78.80 and 78.00. If bulls can fend off the pressure and push prices back above 82.20, then expect a move back towards the 83.00 resistance and 84.50 level.

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