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The USD/JPY exchange rate is quoted at 106.00 at the start of the new week, a level that is acting like a magnet for Dollar-Yen says analyst and technical forecaster Richard Perry of Hantec Markets.

On numerous occasions in the past few weeks we have discussed how 106/107 is a key band of overhead supply of sellers.

We continue to see that over the last two weeks 106 has become even more of an attraction.

This is an ever more neutralising phase for Dollar/Yen but based on the overhead supply and what is now a ten week downtrend, we do still prefer short positions for a test if 105.10.

Effectively, momentum retains a negative bias and rallies are a struggle.

There is resistance around 106.50 above the downtrend (falling at 106.30) and 55 day moving average (at 106.35).

A close back under 106 would be a negative signal now, whilst under 105.75 opens the six week range lows at 105.10.

The dollar has started the new trading week slightly on the backfoot, with a slightly improved appetite for risk forming this morning.

After causing a stir last week on a pause in its vaccination trials, the AstraZeneca/Oxford University collaboration for a COVID vaccine has resumed.

Although there has been little real move through bond markets, there is a mild improvement in equity markets and the dollar is slipping back.

This move may be tempered due to comments from Republican leaders over the weekend that suggested a fiscal package agreement seemed to not “look that good right now".

Having digested a dollar rebound and equities decline in recent weeks, broad markets have begun to form ranging conditions in recent sessions and this looks set to continue today.