USD/JPY: 106.35 is a key support, 107 to give?

  • USD/JPY: steady in Tokyo's open with a slight bid.
  • USD/JPY: remains below key resistance. 

Currently, USD/JPY is trading at 106.35, down -0.06% on the day, having posted a daily high at 106.49 and low at 106.25. USD/JPY noise stuck with the Moritomo scandal while focus stayed with N.Korea and trade wars. The US yields recovered post-NFP negativity in the wages report. 

DXY underwater on nonfarm payrolls, but, watch the Libor/ OIS spread

While there was a lack of drivers at the start of the week in overnight markets, the US three and ten-year treasury auction was coming in line with the market. The US 10yr treasury yield fell from 2.90% to below 2.87% with US equities slowing up. The Fed fund futures were still pricing three more hikes by end-2018 and another hike in 2019.  

Piercing the descending resistance of the steep channel from 113.38 Jan 2018 highs while traders await US CPI and retail sales this week, USD/JPY was left to move in a narrow range of 106.35/73 and struggled around the 21-D SMA at 106.75. 

CPI inflation preview: to  rise only gradually - Nomura

USD/JPY levels

USD/JPY pair is biased lower according to technical readings in the 4 hours chart, as Valeria Bednarik, chief analyst at FXStreet noted mostly due to its failure to settle above the 107.00 level. "In the mentioned chart, the pair is now battling below a horizontal 100 SMA, and far below the 200 SMA, while technical indicators head south within positive territory and nearing their mid-lines. A break below the daily low of 106.35 is required to confirm a bearish extension for this Tuesday."

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