USD/JPY trades narrowly still after early dip in Asian trading
No significant movement in the pair as it hugs the 107.20 levels tightly
Putting aside the early dip during Asia, USD/JPY has largely been a snooze fest today. The pair has just been trading between 107.20-30 levels since then with little conviction by buyers or sellers to provide any direction for the pair.
I think that also exemplifies the kind of mood that we're seeing in equities today.
As for USD/JPY itself, the lows today is supported by the 100-hour MA (red line) and that will be the key level to watch for any break. Meanwhile, there will be further support for the pair at 107.08 in the form of the 200-hour MA (blue line).
The latter has been a key support level as it helped to stall any declines in trading last week.
In terms of the bigger picture, topside resistance sits at the 61.8 retracement level on the daily chart @ 107.87. There will also be additional resistance near the 108.00 figure level.
As for downside levels, apart from the two hourly MAs above, there's also support from a upward trendline formed so that is a level buyers can lean on as well.
I remain unconvinced in the pair's upside potential over the long haul still despite switching from shorts to longs, but unless the trendline breaks it's tough to argue against the upside move for the time being.