- The USD / JPY is down from the highest of the month as US Treasuries and Asian stocks fall.
- 50-day SMA, immediate upward monthly resistance line.
- A two week old uptrend line on bear radars.
After another 50-day SMA U-turn, the USD / JPY drops to 107.73 in the middle of the first trading hours on Wednesday. In addition to said SMA, a downward trend line from April 30 also protects the immediate rise of the pair.
That said, the risk tone of the market is also very late and weighs down the safe haven pair. While depicting the tone of risk, yields on 10-year US Treasuries drop two basis points (bps) to 0.69% while the MSCI Asia-Pacific equity index excluding Japan drops 0.10 % at press time.
As a result, sellers are targeting a fortnight-old rising trendline, now at 107.30, during further declines.
However, a sharp break below 107.30 will confirm a short term bullish bearish formation, which in turn will amplify the weakness of the quote towards the revision of the monthly low near 106.00.
Alternatively, a 50-day SMA level of 107.75 and the aforementioned resistance line around 108.10 could keep buyers in check.
As the pair rises above 108.10, a 200-day SMA level of 108.30 will act as another upward barrier before the April high of 109.38.
USD / JPY daily chart
Trend: expected decline