FxWirePro: USD/JPY pauses bull run at 112 handle, overbought conditions may cause some pullbacks

USD/JPY chart - Trading View 

Spot Analysis:

USD/JPY was trading largely unchanged at 111.91 at around 05:45 GMT

Previous Week's High/ Low: 110.79/ 109.12

Previous Session's High/ Low: 112.04/ 111.20

Fundamental Overview:

US dollar consolidates near a one-year high as the U.S. Federal Reserve prepares to begin asset tapering in November 2021.

The impasse over the U.S. debt ceiling that threatens to shut the government down continues.

U.S. Senate Republicans blocked efforts by the Democrats to avert a potentially crippling U.S. credit default as federal funding expires on Thursday and borrowing authority on around Oct. 18.

Technical Analysis:

- USD/JPY pauses at 112 handle with potential Doji on the daily charts

- The pair has paused its 6-day bullish streak, but outlook remains strongly bullish

- Oscillators are at overbought territory, raising possibility of some pullbacks

- Price action has broken major trendline resistance and 76.4% Fib retracement

Major Support and Resistance Levels:

Support - 111.40 (5-DMA), Resistance - 113.02 (88.6% Fib)

Summary: USD/JPY has paused upside at 112 handle. Outlook remains bullish. Next bull target lies at 88.6% Fib at 113.02.