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  • 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. 

Hourly chart

Trend: Bearish

Technical levels