USD/JPY defends 107.00, but negative S&O 500 futures hurt

• USD/JPY found bids below 107.00, but ensuing recovery capped around 107.15.
• The drop in the S&P 500 futures weighs over the USD/JPY.
• Eyes the US CPI and Fed minutes release. 

Having hit a session low of 106.96, the USD/JPY pair now trades in the 107.15 neighborhood, although the recovery may not be last long as the S&P 500 futures are flashing red.

The currency pair closed above 107.00 yesterday as the risk-on rally in the stocks pushed the anti-risk Japanese Yen lower across the board. However, the S&P 500 turned negative in Asia and were last seen reporting a 0.45 percent or 12 point drop.

Consequently, the USD/JPY is trading in the red and may drop to fresh session lows below 106.96 if the European stocks turn risk-averse.

Meanwhile,  a better-than-expected US CPI figure could put a bid under the US dollar. Also, the greenback could find takers if the Fed minutes sound hawkish.

USD/JPY Technical Levels

Acceptance above 107.49 (April 5 high) would add credence to the higher lows and higher highs pattern seen on the daily chart and could yield rally to 107.91 (Feb. 21 high) and 108.28 (Jan. 26 low). On the other hand, a break below 106.62 (previous day's low) would signal a violation of the higher lows pattern and open the doors to 105.66 (April 2 low) and 105.25 (March 2 low).