USD/JPY bears take on critical support area on broad dollar weakness

USD/JPY has been slammed in Tokyo with a weak dollar across the board. Currently, USD/JPY is trading at 103.73, down -0.15% on the day, having posted a daily high at 103.94 and low at 103.69.

US dollar index drops on Monday after hitting 7-month highs

USD/JPY is in a well defined retracement of last week's closing bid that took the pair from 103.33 to 104.47. Sellers took the major down from the 104 handle to recent aforementioned lows that has broken the 200 sma on the 1hr sticks at 103.75 while the ascending support line was broken overnight opening the trap door for lower levels. US yields made a u-turn and Wall Street couldn't make anything of continued positive earnings in Financial stocks, but rather correlated instead to lower oil in a lower demand driven market at the start of the US week with a bearish tone around the US economy again: US economic outlook fades in Q3 - AmpGFX

Meanwhile, for today, we have had Japan finance minister Aso hitting the wires saying that they are closely watching FX moves and that excess FX volatility and disorderly moves would hurt the Japanese economy. We now await US CPI from the US shift as net major catalyst.

USD/JPY levels

Analysts at Scotiabank had marked near-term support here and suggested a break could see weakness to the mid-102s. "USDJPY gains also appear to have stalled above 104.20 with considerable resistance at 104.50." Meanwhile, spot is presently trading at 103.73, and next resistance can be seen at 103.74 (Hourly 200 SMA), 103.79 (Yesterday's Low), 103.87 (Weekly Classic PP), 103.88 (Daily Open) and 103.92 (Hourly 100 SMA). Support below can be found at 103.69 (Daily Low), 103.67 (Daily Classic S1), 103.49 (Weekly Low), 103.32 (Daily 100 SMA) and 103.19 (Daily Classic S2).