USD/JPY is sticky around 109.50 levels in the European morning
With bonds also staying bid on the session, that is keeping yen pairs more heavy in European morning trade with USD/JPY continuing to linger near the 109.50 level.
The near-term bias continues to favour sellers at the moment but they are finding it tough to chew through bids and swing region support around 109.50-70 with further near-term support seen closer @ 109.44.
With price action falling back to current levels, it brings back the "old" range for USD/JPY:
The swing region around 109.50-70 is more evident in the daily chart above with further key support seen closer around 109.00 before moving towards the key daily moving averages @ 108.68 and 108.52 respectively.
Those will be key levels to keep an eye out for in case we do see a further downside extension in the coming sessions.
Meanwhile, any topside move requires buyers to try and keep above the 110.00 handle - getting back above the key hourly moving averages near the figure level would be the first step - before attempting a firm break above recent highs around 109.29.
If anything else, I would argue that the fact we're seeing US equities continue to linger near all-time highs but not being too bullish or seeing a correction over the past few days is leaving USD/JPY traders in a bit of a pickle in deciphering the overall risk mood.
The new coronavirus outbreak is helping to tip the scales a little but unless there is a more key catalyst, traders may still need some other push before chasing a trending move.
Anyway, the longer-term picture of USD/JPY is something to also be wary about:
Price is still sitting in a narrowing wedge with the trendline resistance helping to keep a lid on the recent upside move in the pair with the downside trendline support seen @ 105.18.
The pair is screaming for a breakout and when one does eventually come, it could lend towards a much bigger move in USD/JPY than the ranges seen in recent years.