USD/JPY bid, but below 200-day MA, Chinese stocks report losses

• USD/JPY picked up a bid on signs of stability in the Asian equity markets.
• However, the pair remains below 200-day MA of 110.22, possibly due to a drop in Chinese stock markets.

The stock markets in Asia regained poise, pushing the USD/JPY above 110.00, but a break above the 200-day moving average (MA) of 110.22 remains elusive, possibly due to risk-averse Chinese stocks.

At press time, the Shanghai Composite index is reporting a 0.60 percent or 17 point drop. Other major Asian equity indices - Nikkei, S&P/ASX 200, Hang Seng, and Kospi - are flashing green. Meanwhile, the USD/JPY pair is trading at 110.10.

The JPY may pick up a bid, pushing the USD/JPY back below 110.00, if the Chinese stocks report deeper losses. Further, the fears of the treasury yield curve (spread between the 10-year yield and the 7-year yield) inversion could keep the USD bulls at bay.

USD/JPY Technical Levels

Resistance: 110.22 (200-day MA), 110.90 (June 15 high), 111.40 (May 21 high).

Support: 110.00 (psychological level), 109.79 (4H 100MA), 109.39 (ascending/bullish 50-day MA).