• The USD/JPY is trading above a 24-year-old resistance trendline.
• A risk-on market mood weighed on safe-haven peers, though high US Treasury yields dragged the USD/JPY up.
• USD/JPY Technical Outlook: Upward biased, though a pullback towards January 4 cycle low at 116.35 is on the cards.

The USD/JPY extends last Friday’s rally, above a 24-year-old downslope trendline broken on Friday, when the USD/JPY recorded a close at 117.27, and higher US Treasury yields underpin the USD/JPY pair. At the time of writing, the USD/JPY is trading at 117.99.

Financial markets mood remains fragile, as illustrated by European equities finishing with gains, contrarily to what’s happening in the US, where the main indexes are in the red, except for the Dow Jones. In the meantime, the US Dollar Index, a gauge of the greenback’s measurement against a basket of its rivals, fell from the 99.00 mark, down 0.28%, sits at 98,85. Meanwhile, the US 10-year T-note yield advances eleven basis points, sitting at 2.121%, as traders prepare for the US central bank first rate hike.

Overnight, the USD/JPY climbed steadily towards the 118.00 mark, opening near the session’s lows at 117.28. Then it kept grinding higher, stalling at 118.00 as bulls took a breather and prepared an assault towards January 2017 cycle high around 118.61.

USD/JPY Price Forecast: Technical outlook

The USD/JPY is still upward biased. Once the triple-bottom target was fulfilled, one could have expected a mean-reversion move towards the January 4 high at 116.35. However, as the US central bank is about to hike rates on Wednesday,  alongside the market mood, it boosted the greenback.

That said, the USD/JPY first resistance level would be the 118.00 mark. Breach of the latter would expose January 2017 cycle high at 118.61, followed by 119.00 and the 120.00 mark.