USD/JPY hovers around 108.30-40 so far in the European morning

USD/JPY H1 08-07

Price attempted to try and challenge the Friday highs in Asia Pacific trading but the move was rather short-lived with the pair then slowly inching to a low of 108.28 amid weaker risk sentiment as 10-year Treasury yields fell by around 2.5 bps to 2.008%.

But with US equity futures stabilising and Treasury yields also inching back up, the pair is now trading back near 108.40 as markets try and figure out what to do next. The key focus among market participants remains the Fed narrative and we only will have speakers lined up on that front starting from tomorrow.

For USD/JPY, the near-term bias still continues to favour buyers as price holds above both key hourly moving averages and that will be the risk to define and limit any upside move. Hence, support around 108.00-10 will be the key spot to watch for any near-term correction back to the downside in the coming sessions.

Meanwhile, daily resistance around 108.50 is still proving to be a tough spot for buyers to close above and will be the first challenge for an extension higher. That will be followed by swing region resistance around 108.60-80 before offers come in at 109.00.

From a technical standpoint, if price can take a peek above 109.00 then there's an argument for a further extension towards 110.00. However, that needs to be backed up by fundamentals via global trade as well as the Fed over the next few days.