USD/JPY buyers find support from the 200-hour moving average for now

USD/JPY H1 14-05

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?