USD/JPY buyers find support from the 200-hour moving average for now
The dollar and yen are the two leading currencies on the day so far, but the yen is keeping ahead of the greenback as we see USD/JPY trade under 107.00.
European equities are still facing a rough time, down by over 1%, while Treasury yields are also looking a little heavy on the session. 10-year yields are down by nearly 4 bps to 0.615%.
That is helping to keep the yen underpinned as we see USD/JPY around 106.80 levels.
The downside move over the past few sessions have been limited by the 200-hour MA (blue line) currently @ 106.78. That is the key line in the sand right now to prevent a further drop to retest support around 106.45-50 next.
As such, the near-term bias is now more neutral with buyers needing to climb back above 107.00 and the 100-hour MA (red line) @ 107.09 to seize back control.
But amid the softer risk mood and potentially further sell-off in risk, I would argue that sellers are favoured from a fundamental perspective but it is still early in the day.
Besides, the 200-hour MA is still stalling the drop so sellers also have their work cut out for them and have to show more conviction to drive more downside momentum.
The S&P 500 is where I'd say the battleground really is, as we see a rejection at the 61.8 retracement level but the question now is, can dip buyers prevent a drop under 2,800?