Price is moving back towards a test of the 200-hour MA

The pair is now trading near session lows @ 131.13 currently, as the dollar and yen are holding strong on the day. As mentioned earlier, I'm seeing this as a broad dollar move but the yen's stability appears to come from bids against the euro and sterling.

Right now, the 200-hour MA (blue line) @ 131.02 will be a key test in the near-term (it failed yesterday) as sellers look towards shifting the bias back to their side. A break below will open up further incentive for further downside pressure, as the pair has not traded below both hourly moving averages since 28 June.

For buyers, they need to hold above the 200-hour MA and look towards getting back above the 100-hour MA (red line).

But even then, there are crucial resistance levels that they need to crack through. The 200-day MA @ 131.91 is the first one followed by the 23.6 retracement level @ 132.15. Those are areas where sellers are able to lean on and will prove tough for buyers to break above without further catalyst.

With USD/JPY also sitting under 113.00 now, it's hard to look into further yen weakness unless there is some other catalyst to push the yen lower beyond current levels. There are hints of exhaustion right now in the rally across yen pairs/crosses.

If near-term levels start to give way (like the ones highlighted above), we could be set for further retracement to the downside before further upside is seen.