USD/JPY backing away from the figure level, but is not down for the count just yet
The dollar may be surrendering earlier gains in trading today, but the retracement hasn't yet broken any key levels for dollar pairs so that will still keep bulls in the driver's seat.
For USD/JPY, the pair made a run up towards 110.00 but failed to break above the figure level in yesterday's trading. Today's high was at 109.92 but that was at the start of the session before it fell in straightforward dollar selling.
The upside near 110.00 also coincides near the 50.0 retracement level on the daily chart @ 109.93. The confluence of those two levels is what is holding back buyers for now, and the fact that US yields continue to track below 3% doesn't help either.
As for any downside risk in the pair, look towards the near-term chart. The pair is closing in on a test of the 100-hour MA @ 109.49. That will be key in determining near-term momentum and if the recent rally is grinding towards a halt.
The last two times the pair broke below the 100-hour MA earlier this week, it managed to climb back above in a brief span of time. But this time around there's a feeling of fatigue, particularly after failing to break above the key levels mentioned.
Either way, the 100-hour MA will be a key battleground for buyers and sellers in determining near-term momentum for the pair. Stay above and is bullish, a break below begs a rethink of the recent uptrend.
