USD/JPY Price Analysis: Pares intraday gains, up little around 113.30-35 area

• USD/JPY struggled to capitalize on its modest intraday uptick amid renewed USD selling bias.
• The risk-on impulse undermined the safe-haven JPY and might help limit any further losses.
• Slight overbought RSI could trigger some long-unwinding trade and deeper corrective slide.

The USD/JPY pair erased a major part of its intraday gains to the 113.60 region and was last seen hovering just a few pips above daily lows, around the 113.30-35 region. 

The US dollar came under some renewed selling pressure during the early part of the European session and extended the previous day's retracement slide from 13-month tops. This, in turn, was seen as a key factor that acted as a headwind for the USD/JPY pair, though the risk-on impulse undermined the safe-haven Japanese yen and helped limit any deeper losses.

Looking at the technical picture, the recent strong positive momentum from the vicinity of the 109.00 level stalled near a resistance marked by the top boundary of an upward sloping channel. RSI on the daily chart is still holding in the overbought territory, which might trigger some long-unwinding trade and set the stage for a deeper pullback for the USD/JPY pair.

That said, the lack of any meaningful slide warrants some caution before confirming that the USD/JPY pair has topped out in the near term and positioning for any further depreciating move. From current levels, the 113.00 round-figure mark seems to act as immediate strong support, which if broken decisively should prompt aggressive technical selling.

The USD/JPY pair might then accelerate the downfall towards testing the next relevant support near the 112.25-20 horizontal zone. Any subsequent decline might still be seen as a buying opportunity and remain limited near the 112.00 round figure.

On the flip side, the 113.55-60 region now seems to have emerged as an immediate strong resistance, above which the USD/JPY pair could challenge the trend-channel barrier just ahead of the 114.00 mark. Some follow-through buying will be seen as a fresh trigger for bullish traders and pave the way for an extension of a multi-week-old bullish trend.

USD/JPY 4-hour chart

Technical levels to watch