USD/JPY: a sell on rallies, eyes on 112.50 target?

Currently, USD/JPY is trading at 113.35, up 0.16% on the day, having posted a daily high at 113.54 and low at 113.15.

USD/JPY has been perking up in the early Asian shift and has been a bid in the Tokyo open on risk on markets after suffering Japanese corporate's hedging this week. Yellen's dovish testimony accelerated the downside in the major despite a strong performance on Wall Street with the Dow making fresh YTD highs while yields dropped.

Bets for a Fed rate hike have diminished and been pushed back until at leat the end of the year, although not completely off the table with a supportive Beige Book and bullish Q&A's session post-Yellen's testimony. 

"The momentum indicators now generally seem to be suggesting that the dollar may have formed a medium term top, and selling rallies is preferred in the near term," suggested Jim Langlands at FX Charts. 

USD/JPY levels

USD/JPY: The daily charts look as though they are topping out

Valeria Bednarik, chief analyst at FXStreet noted that the 4 hours chart shows that the decline accelerated after the price broke below the base of the daily ascendant channel that led the way since early June, while technical indicators pared their declines, holding near oversold readings. "In the same chart, the price remains above its 100 and 200 SMAs, with the shortest now in the 112.50 regions, offering a key intraday support, as below it the bearish momentum will likely accelerate."