FXStreet (Bali) - According to Valeria Bednarik, Chief Analyst at FXStreet, the upside remains favored in USD/JPY, for a potential re-test of 123.56 trend highs and beyond. Key Quotes "The USD/JPY pair fell down to 122.21 at the beginning of the day, as the Japanese yen was buoyed due to its safe haven condition. The currency, however, changed course after the release of the latest Japan GDP figures, showing that the economy contracted in the third quarter." "Gross domestic product declined an annualized 0.8% in the three months to September, well beyond the 0.2% contraction forecast. The negative reading fueled hopes of a QE extension in Japan, leading to a steady advance in the pair which regained the 123.00 level in the European morning." "The short term technical picture shows that the upward momentum has diminished, but that the upside remains favored, as in the 1 hour chart, the pair is well above its 100 and 200 SMAs, while the technical indicators are turning flat near overbought levels." "In the 4 hours chart, the technical indicators present tepid bullish slopes above their mid-lines, whilst the price is well above its moving averages, all of which supports additional gains, particularly on a break above 123.55, last week high." For more information, read our latest forex news.