USDJPY has formed lower highs and found support at the 112.00 major psychological level, creating a descending triangle pattern on its 4-hour time frame.

Price bounced off the bottom to make another test of resistance, which appears to be keeping gains in check for now. 

The 100 SMA is above the longer-term 200 SMA ,though, which means that the path of least resistance is to the upside. This suggests that a break higher could be possible, sending price up by around 150 pips or the same height as the chart formation. 

Stochastic is on its way down, signaling that sellers could regain the upper hand. If so, USDJPY could still make its way back down to the triangle support and keep trading sideways. 

The dollar caught a bid against its peers when the consumer credit report posted a stronger than expected result. Credit card spending leading up to the Thanksgiving holidays buoyed debt up from $20.5 billion to $28 billion in November while auto and student loans also ticked higher. 

The S&P and Nasdaq continued their push for another round of record highs but the Dow closed in the red. FOMC members Bostic and Williams shared their views on the economy and warned of potentially weaker inflation weighing on rate hike prospects.

Only medium-tier reports such as the NFIB Small Business index and JOLTS job openings data are due from the US today. Japan just printed its average cash earnings report and showed a stronger than expected 0.9% gain versus the 0.6% consensus. Japanese consumer confidence data is due next and a gain from 44.9 to 45.1 is eyed. 

By Kate Curtis from Trader’s Way