- Yen is drawing bids and pushing USD/JPY lower despite the risk-on environment.
- The pair has fallen back key average and looks heavy.
The USD/JPY pair is currently trading near 108.10, having hit session highs near 108.55 in early Asia.
The pair failed to keep gains above the 50-hour average, currently at 108.23, despite the risk-on action in the equity markets and the talk of coordinated easing by the major central banks. The futures on the S&P 500 are currently a 0.20% gain on the day. The index surged by 4.6 percent on Monday.
The Reserve Bank of Australia is widely expected to kick off coordinated easing with a 25 basis point rate cut on Monday.
Even so, the USD/JPY pair is feeling the pull of gravity and could slide further toward 107.50, as the hourly chart relative strength index (RSI) has breached the ascending trendline – a sign the bears are gaining strength.
A break above the hourly chart resistance at 108.58 is needed to revive the immediate bullish bias.