USD/JPY fends off a push below 109.00 for the time being
The pair fell to its lowest level since late May yesterday but managed to keep a daily close just above the 109.00 handle.
Sellers have been keeping the pressure this week on a break below the 100-day moving average (red line) and we may be approaching a key crossroads going into the US non-farm payrolls report later in the week.
Right now, the pair is challenging support at 109.00 and the 61.8 retracement level @ 109.07 but a firm break below that leaves a pocket of space for price to travel towards 108.50-60 and then the May lows next @ 108.33-35.
The bond market remains a key spot to watch when viewing yen pairs and for now, Treasury yields are steadier around 1.18% after the Monday drop but they are still caught in a series of lower highs, lower lows and that poses a threat for USD/JPY buyers.
In turn, more negative sentiment in the pair could also translate to additional dollar weakness as the currency continues to struggle for the most part post-Fed.
For now, keep an eye out on the levels above but it certainly looks like we're setting up for a big test of things ahead of Friday with the US non-farm payrolls on the agenda.
