USD/JPY: 115.51/62 mid-January high back in focus, despite geopolitical tensions?

Currently, USD/JPY is trading at 113.78, up 0.34% on the day, having posted a daily high at 113.87 and low at 113.15.

USD/JPY has made further tracks to the upside, still below the 114 handle and recent highs of 114.35 scored last week in the triple top area. The DXY, however, remains in the red with oil and gold performing well on the day within their unique correlation. The yen, in fact, is about the only major currency that is giving way to the dollar and despite North Korea test firing a new, longer-range missile on Sunday - markets have seemed to ignored that.

An article in the Guardian reported on the seriousness of this act as follows: 

"The White House said on Sunday North Korea has been “a flagrant menace for far too long” and that President Donald Trump “cannot imagine that Russia is pleased” with North Korea’s latest missile test, saying the projectile landed close to Russian soil.

Washington has previously warned that a test of an ICBM could be met with retaliation, including a possible military response. North Korea, however, has vowed to continue with its quest to marry a miniaturised nuclear warhead with a missile capable of reaching the US mainland to counter what it calls American “aggression”."

USD/JPY levels

• USD/JPY: short-term technicals: bearish - Scotiabank

USD/JPY last week failed to clear 114.38 on 3 occasions and the slow stochastics indicator is rolling over – both suggest that we are likely to see a near-term dip lower, as explained by analysts at Commerzbank: "The market has recently eroded the 112.54 resistance line and the top of the cloud at 112.81 and these are expected to now act as support. We look for a challenge of the 115.51/62 mid-January high. Above here will target the 116.89 2015-2017 downtrend. Intraday Elliott waves counts suggest that we should see recovery from current levels."

• EUR/JPY: testing key resistance here at 124.80
• Gold intermarket: close ties with WTI stuck around 10 hourly sma, capped here?