Things are not looking good for the dollar as we are seeing USD/JPY reverse course after testing its 200-day moving average (blue line) since the latter stages of last week.

The upside momentum appears to have stalled and with yields retreating off the highs over the past few sessions, it is putting a drag on yen pairs in trading today.

Of note, USD/JPY is now down to 104.78 – its lowest level since 1 February.

The push below 105.00 is a significant one for sellers and even more so when you drill down to the near-term chart:

Sellers are now back in control upon a push below the 200-hour moving average (blue line) and are threatening a break below the 38.2 retracement level @ 104.84.

Further support is seen closer towards 104.55-61 but if this is the start of a turning point for the dollar, a return back to 103.50 to 104.00 isn’t out of the picture here.

As we navigate through the week, just keep an eye on the bond market as well in gauging sentiment for USD/JPY and yen pairs in general.