Price bounced off support from the 110.00 handle this week
I never really like looking at charts and price movement during this time of the year. No matter what the technicals or fundamentals say, price can literally go any where in times of thin liquidity. And this week is generally the quietest week in markets although this year is a bit wilder thanks to movement in equities.
USD/JPY managed to bounce off the 110.00 support level this week and yesterday's rebound in US stocks saw the pair move back above 111.00 and close above the 200-day MA (blue line).
But the highs were capped by the May high of 111.40 and now price is flirting with the 200-day MA once again at 111.01. Hold a move below that and the bias turns more bearish again.
In terms of what may draw price action today, there isn't much but look out for a large expiry at 111.50 if anything else. Otherwise, trading sentiment will once again rely on the performance of the US cash equity market.
So, if you're going to be trading USD/JPY or yen pairs in general today, keep an eye out equities performance. They'll move together hand in hand. Although the Nikkei closed higher by nearly 4% earlier, US equity futures are in the red today with E-minis down by 0.5% now. And that's the reason why the yen is still bid so far to start the day.