USD/JPY moves back up to test the 100-hour moving average

USD/JPY H1 12-03

Yen crosses have been extremely volatile in trading over the past few days and even USD/JPY has seen swings of more than 100 pips in a few hours at a time this week.

Today is not much of an exception as the pair holds a 172 pips range with price now climbing back above 104.00 after having hit a low of 103.09 earlier in the day.

The low tested minor support around 103.10 before bouncing back as we also see US futures pare some of its earlier losses. S&P 500 futures are down by just under 3% now after having been down by ~4% earlier in Asia Pacific trading.

For USD/JPY, price is now challenging the 100-hour MA (red line) @ 104.16 and a break above that will see the near-term bias turn more neutral once again.

However, there is still resistance around 105.00 and 105.30 levels that buyers still need to break to establish more decent momentum to the upside.

And with the risk mood still more negative and the weekend fast approaching, it is hard to get too optimistic about the pair for the time being.

That said, Treasury yields are also trying to find its identity on the week. Despite being lower today, 10-year yields are at 0.80% and that is well off the record low earlier this week at 0.31%. Have we found a bottom in yields?

Again, there are plenty of moving parts in the market but one can always lean towards the chart for more confirmation about what is going on.

For now, sellers are looking to keep near-term control and as long as a firm daily break above 106.00 isn't playing out for USD/JPY, I would argue that the path of least resistance remains for a move lower considering recent developments with the virus.

In any case, also keep in mind the repatriation of funds back to Japan may be playing a role here in keeping the yen underpinned recently. The Japanese fiscal year is coming to a close soon on 31 March and plenty of those flows would have already played out.