USD/JPY: looking for a break of 100/200 DMAs resistance

• USD/JPY is capped at the 100/200 DMAs.
• Politics on the cards for the pair this week.

USD/JPY is quietly chipping away at the upside in an attempt to recover the extensive losses this month from 114.73 highs. USD/JPY is having a tough time of the first stabs at the 100 and 200 DMAs ahead of the 112 handle and 19th Nov low of 111.88.

There has not been much activity across the board though, down to the Japanese and US Thanksgiving holidays while markets await the outcome of the next round of progress in the US tax plan reforms. The Senate appears to be set to hold a floor vote on the tax reform bill next week.

Further political risks

Meanwhile, as analysts at Brown Brothers Harriman noted as a potential ongoing risk, the probe into Russia's attempt to influence last year's US election took another turn with reports suggesting former national security adviser Flynn has stopped talking to the White House, which perhaps signals his cooperation with the special investigation, led by Mueller.  

The week ahead: breakdown of key events - Nomura

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that the risk remains tilted to the downside, according to technical readings, given that in the daily chart, the pair was unable to recover above its 100 and 200 DMAs, both converging around 111.60. 

"Indicators in the mentioned chart have lost strength downward but barely turned flat near oversold readings, not enough to confirm further recoveries ahead. In the 4 hours chart, the 100 SMA crossed below the 200 SMA for the first time in over two months, but are both far above the current level in the 113.00 region. Technical indicators in this last time frame have recovered within bearish territory, but the RSI already turned south, currently around 41, indicating limited buying interest around the pair," Valeria added further.