USD/JPY is back to near flat levels on the day now
Price formed a double-bottom pattern earlier in Asian trading and recovered since then but the recovery is holding up as risk sentiment is starting to get a little better as we get into European trading. E-minis are now near session highs for the day, being down by just under 0.3% currently:
The improvement in equities sentiment also sees Treasury yields turn flat on the day as well after being lower in trading earlier today. It's still a bit early to read much into this as sentiment remains very fragile still but it's a good sign for yen pairs if this holds up ahead of US trading.
For USD/JPY, the key level for any upside move to watch out for will be one towards the 100-hour MA (red line) @ 112.79. Buyers have been unable to gather enough conviction to test the level over the past few sessions and that keeps sellers in near-term control to drive price lower.
As for downside levels, the key one to watch out for will be the 100-day MA @ 112.28. That has been the key level that is holding up the upside momentum in the pair since May. If price starts to break below that, we could very well see a new shift in momentum in USD/JPY.
