USD/JPY failed to hold to gains and pulled back during the American session. The pair peaked at 112.89, the highest level since last Thursday and then turned to the downside. Recently it dropped to 112.35, the same level it closed yesterday. The pair was trading at 112.35/40, marginally higher for the day. The recovery from 1-year lows that reached last week at 110.60 found resistance below 113.00 and also under the 20-day moving average that stands at 112.99. USD/JPY technical outlook “The short-term technical picture is showing that the early upward strength has lost steam, given that the price is now a few pips below its 200 SMA, whilst the technical indicators have turned south, and are about to cross their mid-lines towards the downside”, said Valeria Bednarik, Chief Analyst at FXStreet. According to Bednarik USD/JPY 4-hour chart, shows that the rally stalled a handful of pips below its 100 SMA,” while the technical indicators have also turned lower, but remain well above their mid-lines, limiting chances of a sharper decline, as long as buyers surge on approaches to the 112.00/10 region.” Volatility could be limited during the next sessions considering that on Thursday many markets will be closed and Wall Street will have a shortened session. For more information, read our latest forex news.