USD/JPY continues to hold a break above its 100-day moving average
FX remains largely on the sidelines to start the week but one of the more interesting charts since the end of last week is that of USD/JPY.
The pair managed to break key trendline resistance levels last week and followed that up with a break above the 100-day moving average (red line).
Currently, price is still holding above that as buyers keep a break above the key level since June last year. There is some resistance seen closer to 105.00 with the 200-day moving average (blue line) @ 105.61 offering additional resistance thereafter.
The pair has broken a bit of correlation with risk sentiment as the drop in stocks towards the end of last week didn't do much to hurt buyers' resolve.
Even so, the break here remains rather unconvincing to some extent although there is a case that the nudge back higher in Treasury yields is helping somewhat.
The dollar remains in a questionable spot, all things considered, to start the new year and if the market gets over the volatility hump here and focuses back on the Fed put, that could see the dynamics of USD/JPY change once again.
For now, buyers are staying poised but there are still upside challenges from the levels above in play. The risk lies at a drop back below the 100-day moving average @ 104.39.