USD/JPY touches a low of 112.83 on the day
It’s not just USD/JPY that’s on the move but yen pairs in general. The yen is bid as risk tones remain soft across asset classes with oil and equities leading the drop for the most part. For USD/JPY, price is now heading back towards a test of the 100-hour MA (red line) @ 112.80 and a break below that would mean that near-term bias becomes more bearish.
There is some minor support to be had around 112.60-65 before further support and bids are seen near the 112.50 level.
Looking at the daily chart:
After breaking below the broken trendline support, price has struggled to get back above it this week. That remains a key resistance level for buyers to hold a break above in order to work towards extending any upside move back to 114.00. The July high @ 113.17 also acts as a secondary key resistance level that buyers need to navigate through as well.
It’s still a limbo-ish price action around current levels in my view for the pair. The soft risk tones here – should it continue – will lend a hand to drive negative sentiment in the US cash equity market later but barring any major meltdown in equities today, USD/JPY should still hold above the 100-day MA (red line) @ 112.14. That will keep buyers poised ahead of trading next week but again, the resistance levels above need to be broken otherwise sellers will still have reasons to keep the pair pinned down.