A hint of caution again, perhaps?
Equities are still doing decently for the most part – spurred by Trump’s upbeat comments over the weekend – with European equities trading marginally higher while E-minis are trading 0.8% up on the day so far:
US 10-year Treasury yields are also flat on the day at 2.721% currently but there’s a hint of a slightly softer dollar among major currencies. Even so, the peculiar thing is that the yen remains well bid despite the improved risk sentiment today.
The 110.00 handle is a key psychological and support barrier for USD/JPY so expect plenty of focus to center around that level in the trading sessions ahead. Right now, sellers are still maintaining the bearish bias/momentum as price continues to trade under both the key daily moving averages.
But a daily break below 110.00 will only intensify further pressure to the downside with further support then seen at the August low of 109.78 before further the 50.0 retracement level @ 109.56 comes into play.
Looking at other factors that could influence price action, there aren’t any significant expiries rolling off over the next two days so expect plenty of trading sentiment in USD/JPY to be affected by how equities perform instead; particularly US equities.