USD/JPY trades lower near 109.40 currently
The move higher earlier managed to hold above the 100-hour MA (red line) momentarily but as risk sentiment changed course, sellers regained near-term control of the pair. Currently, they are testing a break back under the broken trendline resistance as markets stay cautious in European trading so far.
US 10-year yields are down by more than 2 bps now to 2.389% and that’s helping to weigh on yen pairs. The drop in Italian bank stocks due to rising BTP yields also helped to precipitate a move lower across European equities and that in turn is contributing to the cautious mood we’re seeing this morning.
It’s still all about risk sentiment for USD/JPY so look towards US equities for more clues in trading today. As for key levels to watch out for, buyers will have to reclaim some control first by holding a firm break above the 100-hour MA and 109.70 before returning towards a test of the 110.00 handle.