USD/JPY barely holds above the 200-hour moving average
Price is trading at one-week highs and is finally creeping above the 200-hour MA (blue line) @ 108.59 as buyers look to establish near-term control in the pair. This comes alongside a rise in Treasury yields as the risk mood improves over the weekend after Trump announced that the US will suspend tariffs against Mexico indefinitely.
However, price isn't running away to the topside just yet as it continues to linger near the key near-term level as well as resistance from the 38.2 retracement level @ 108.62.
Those are the levels at play at the moment in keeping buyers from building on the gap higher at the open today. With European traders likely to just extend the earlier sentiment in Asian trading, I reckon a meaningful break higher may not come until we get more of a reaction in US equities later today.
As such, price action is likely to be anchored around these levels for now before we see whether or not US traders are convinced by Trump's weekend announcement; or if they choose to focus on the fact that this doesn't necessarily change things in the bigger picture.
Further resistance is seen close to 108.85-90 before large expiries and offers at 109.00 come into play. The figure level will be a key area to watch out for in the event that buyers do build on a move higher.
Meanwhile, for downside levels, watch out for the 100-hour MA (red line) @ 108.28. If price starts creeping back towards that, it'll be a nervous situation for buyers because if the pair can't even rally on good news, chances are it's going to threaten to hit new lows later on in the week again.
