USD/JPY is quickly approaching the gap lower from yesterday
The pair is climbing to session highs around 104.65 currently and is looking towards filling the gap lower to start the week yesterday just under the 105.00 level.
The rebound is coming as we see the dollar also keep more firm on the day amid a recovery in risk assets after the catastrophic meltdown yesterday.
10-year Treasury yields are now at 0.66%, well off the record low of 0.31% posted yesterday while we are seeing oil prices recover by around 7% from the close overnight.
Meanwhile, US stock futures have also extended gains to above 3% on the day.
Despite the rebound in USD/JPY, the near-term bias continues to favour sellers with the key hourly moving averages resting at 105.28 and 106.80 respectively.
I'd keep an eye on the 105.00 level as that will be a key psychological level for any further turnaround in the pair after the events yesterday.
This is looking to be a good recovery start for risk assets on the day but it is still too early to rule out a mere 'dead cat bounce' for the time being.
