USD/JPY: Eyes on 106.60 on a break of 107 the figure

• USD/JPY consolidates as the dollar holds ground at the 96 figure. 
• 107.00 area that if broken, should clear the way for a test of 106.60.

USD/JPY is currently trading at 107.32 between a range of 107.25 and 107.41, consolidating in the main and trading above the overnight lows of 107.05. The dollar continues to bleed out and fell below the 96 handle with the U.S. 10-year sliding from 2.05% to 2.01%, while 2yr yields fell from 1.77% to 1.73%. The Dallas Fed president Kaplan spoke overnight, albeit not a voter this year, and said that he is concerned that cutting interest rates now “would contribute to a build-up of excesses and imbalances in the economy which may ultimately prove to be difficult and painful to manage.” President Trump was active over Twitter and tweeted that the Federal Reserve “doesn’t know what it is doing.”

• Trump: Has power to remove Federal Reserve Chairman 'If I wanted to' - The Hill

Data from the US on Monday came in below expectations with the Dallas June Fed manufacturing index was falling noticeably.  As for data today, it's pretty quiet out there as we get set for a speech by Fed chair Powell speaking in the NY afternoon on the Economic Outlook and Monetary Policy, including Q&A. Williams will be speaking as well at the OPEN Finance Forum, with Bostic on housing, and Barkin in Ottawa on the same day. 

• Bank Of Japan Meeting Minutes: Apr 24-25

USD/JPY levels

Valeria Bednarik, the Cheif analyst, at FXStreet, explained that from a technical perspective, the bias continues to point to the downside:

"The recovery was limited, and the US Dollar lacks strength for a move higher. The 4-hour chart shows the 20 SMA at 107.50, also a horizontal resistance. If the greenback rises on top it could continue the move to 107.90. On the flip side, 107.20 is protecting the 107.00 area that if broken, should clear the way for a test of 106.60. Technical indicators currently show mixed signals, with a flat RSI slightly above 30 but the trend still favors the downside."