USD/JPY starts to look for a key break to the upside
It is all about the dollar in the currencies space today, as even the softer risk mood isn't quite stopping the greenback from gaining against the yen.
The debate I pointed out earlier in the week is that the wave of dollar strength largely depends on how USD/JPY plays out but both currencies should stand to gain if the economic situation remains dire and the risk-off mood persists into the start of April.
For now, with price breaking above the 100-hour MA (red line) yesterday after buyers defended yet another test of the 107.00 handle, we are seeing the dollar start to gain some real traction to chase a further upside move.
And in the broader scheme of things, this bodes well for dollar strength if this keeps up.
Looking at near-term levels, USD/JPY has room to roam towards resistance near 108.75 with the 200-hour MA (blue line) @ 108.81 also an important level to watch.
However, I would argue that the big picture remains the key technical spot to watch:
Notably, price is now challenging a break above the 200-day MA (blue line) @ 108.33 and a daily close above that will be a good platform for buyers to build on.
Just above that is the 100-day MA (red line) @ 108.97 and that will be another key line in the sand for dollar bulls to explore in chasing further upside momentum.
Considering the dollar strength in this risk-off mood, just be mindful that the Fed may step in again to try and quell the situation so that's a key risk to watch out for today.
