USD/JPY: early offers in Tokyo ahead of key risk events in the Pacific

USD/JPY has sold off in the open in Tokyo with risk-off sentiment starting the day out as we await key events in the Pacific from Chinese manufacturing to capex and retails sales from Australia. 

Stocks on Wall Street were in decline while commodities also felt the pinch as investors see little where else to hide but the greenback in an environment where the masses are sucked in by the Fed's continuous mantra in respect to rate raises this year, and in stark contrast to that of the BoJ who are committed to their inflation target and easy money stance where negative rates could go even further. The BoJ this month is very much in play. First, we head into the nonfarm payrolls showdown at the end of the week.

Chinese data and Aussie retail sales preview: what to expect in AUD/USD?

USD/JPY levels

Valeria Bednarik, chief analyst at FXStreet explained that in the 4 hours chart, the RSI indicator remains within overbought levels. In this last time frame, the 100 and 200 SMAs are located well below the current level, but with no directional strength.

With spot trading at 103.21, we can see next resistance ahead at 103.25 (Weekly Classic R2), 103.27 (Daily Classic PP), 103.27 (Hourly 20 EMA), 103.42 (Monthly High) and 103.42 (Weekly High). Support below can be found at 103.16 (Daily Low), 103.00 (Daily Classic S1), 102.85 (Yesterday's Low), 102.58 (Daily Classic S2) and 102.54 (Weekly Classic R1). Looking to candlestick patterns, we can see a Dark Cloud Cover formation on the 4-hour chart.