USD/JPY off highs, around 106.30 ahead of ISM

• The pair’s upside met resistance in the 106.40 region.
• US 10-year yields rebound from lows near 2.74%.
• Later in the session, US ISM Manufacturing will grab all the looks.

After two consecutive daily pullbacks, USD/JPY is now looking for direction within a narrow range above the key 106.00 the figure.

USD/JPY now focused on US ISM

The pair is trading in a tight range against the backdrop of scarce volatility and thin trade conditions due to the Easter Monday holiday in most of the Old Continent.

The Japanese safe haven has been appreciating in the past couple of sessions, driving spot lower after failing in the 107.00 area during last week. The pair’s down move, however, seems to have found some interim support in the vicinity of 106.10, where converges the 21-day sma.

Today’s mild bias towards the risk-on mood has put a floor to the pair somewhat, while the move is accompanied by a bounce of US 10-year yields off recent lows near 2.74%.

In the US data space, the key ISM Manufacturing is next on tap seconded in relevance by Markit’s manufacturing PMI. In the Japanese docket, both the Tankan Large Manufacturers Index and Large Non-Manufacturers Index came in below expectations at 24 and 23, respectively during the first quarter.

USD/JPY levels to consider

As of writing the pair is gaining 0.03% at 106.31 and a breakout of 107.02 (high Mar.28) would open the door to 107.31 (high Mar.13) and then 107.58 (55-day sma). On the other hand, the next support aligns at 106.12 (21-day sma) followed by 105.92 (10-day sma) and finally 104.56 (2018 low Mar.26).