USD/JPY slips a little as dollar gains ease earlier, but buyers still defending the 100-hour moving average for now
Amid the rise in the dollar earlier today, the pair hit a high of 108.08 but failed to keep a firm break above the 108.00 level. However, buyers did manage to secure a break above the 100-hour MA (red line) after a failed attempt yesterday.
However, with equities also keeping firmer to start the session, there is some mixed feelings in the market as dollar gains ease a little with USD/JPY falling back to 107.70-80 levels.
Right now, price is continuing to test the 100-hour MA @ 107.72 and a break below that level will see the near-term bias turn from being more neutral to more bearish instead.
I would argue that this will be a key spot to watch for any real upside in the dollar's recent run. In essence, the pair is a barometer for dollar demand amid risk flows in the market.
If the dollar gains more than the yen in a risk-off environment in the market, it shows the extent of dollar demand and that gives a good indication of the greenback's movement against other currencies as well; vice versa.
For now, there are hints of mixed sentiment in the market as the dollar is still clinging on to gains but risk is also keeping firmer in European morning trade.
A fall back below the 100-hour MA for USD/JPY will be a setback for buyers as we look towards the US jobless claims report later today to see if that will sway the mood.
