USD/JPY falls to a session low of 105.60
The topside move overnight failed to breach near-term resistance as sellers leaned on the key hourly moving averages to drive price back lower today.
This continues to indicate that sellers are in near-term control with risk defined and limited by the 100-hour MA (red line) and the 200-hour MA (blue line) just above 106.00.
Of note, the track lower in the past few hours is picking up more traction amid weaker Treasury yields as we begin the session. 10-year yields are down to a session low of 1.51%, weaker by 2.5 bps on the day.
At the same time, US futures are also trading at the lows – weaker by 0.3%. All this points to some softening in the risk momentum from overnight and is leading to a continued bid in the yen since Asian trading.
For USD/JPY, price is now hovering around minor support at 105.60 but beyond that we could be staring at a move towards 105.00 again as markets adopt a more cautious approach after what I would like to describe as misguided optimism from yesterday.
As mentioned above, the risk for sellers and any affirmation of a risk-on trade currently lies around the key hourly moving averages closer to 106.14-23.