USD/JPY consolidates below 113.00 after early spike

FXStreet (Bali) - After an early attempt towards 113.00 in interbank trading - no follow though -, USD/JPY has been treading water for the last few hours, consolidating around 112.75 amid thin liquidity due to Tokyo markets being on the leave today.

Valeria Bednarik, Chief Analyst at FXStreet, notes: "Not only the USD/JPY gaps higher, but it also trades at levels not seen since December 2007, flirting with 113.00. The rally sees no relief with the 1 hour chart showing indicators at extreme overbought territory yet still heading higher, with no signs of changing direction."

Valeria adds: "The 4 hours chart shows a steady advance of almost 380 pips which left indicators also in extreme overbought territory, but still heading higher and far from suggesting any small pullback. Last Friday’s close around 112.30 is the immediate support as pullbacks towards the level are likely to be seen as buying opportunities; a break above 113.10 on the other hand, exposes the pair to further gains, eyeing then an approach to the 114.00 price zone."