USDJPY Eyeing Bullish Breakout

At the time of writing, the pair was up nearly half a percent, following US yields higher. Since the 2-year yield has already broken to new cycle highs, the USDJPY pair might follow soon.

The first resistance is spotted at previous highs near 116.25. Should the greenback rally above it, larger stop-losses of short positions could be triggered, likely sending the USD toward the 117 level in the initial reaction.

So far, it looks like traders are more focused on inflation problems coming from the military conflict than the actual war. Higher inflation means more rate hikes, which should be bullish for the USDJPY pair. 

Alternatively, the support could be at the 50-day average (the purple line) at 115, followed by the medium-term uptrend line some pips below the 50DMA. The immediate outlook appears bullish as long as the greenback trades above the trend line, but it needs to make new highs soon to confirm the bullish narrative.

Later today, January JOLTS Job Openings and the EIA's weekly Crude Oil Stocks Change data are on the schedule, ahead of Thursday's critical US inflation report.