USD/JPY hovering above 114.00

USD/JPY remains steady, moving sideways in a modest range below 114.30 and above 113.90. The pair has been able to move off lows but it is consolidating daily losses. The yen gained momentum on the back of fears about a hard Brexit, ahead of tomorrow’s key speech from UK PM Theresa May.

UK Prime Minister May’s Brexit speech in focus – MUFG

So far, the Japanese currency is the best performer on Monday, among the most traded currencies. On Asian hours the US dollar bottomed at 113.60, hitting the lowest level in a month. From the lows bounced to the upside, but the recovery was capped by 114.30. 

Fails below 114.00

Just like it happened last Trusty, the pair was rejected from levels under 114.00. That area is becoming an important short-term support. A consolidation below could open the doors for another decline, probably to test 113.10. 

The short-term trend and momentum continue to favor the downside. Today the pair is falling for the sixth day in a row. Volatility is likely to remain high during the week ahead of Donald Trump’s inauguration (Jan 20). A sharp rise in US bond yields could easily boost the USD/JPY to the upside.