Technical Analysis

USDJPY tilts toward the day lows and MA targets

What would tilt the bias more to the downside in the USDJPY

What are the charts saying to that idea?

Looking at the hourly chart, the price broke lower last week after falling below a floor in the 106.629 to 106.705 area.   The price moved sharply lower and bottomed on Friday at 104.18.  On the same day, the the price rebounded above the 50% retracement of the move down from the July 20 high at 105.853. On Monday, the price moved even higher with a move to 106.466 before tilting back to the downside (the price closed at around 105.94). 

In today’s trading, the high reached up toward 106.18 in the Asian and New York session  (double top), but has fallen back lower over the last 4 so trading hours.

So where do we stand now?

The fall lower has taken the price back toward a lower channel trendline.  Also near the trendline sits the 200 hour moving average, and the swing low from yesterday’s trade at 105.57-59 area.  Below that sits the 100 hour moving average at 105.458.

If the price is to go lower (like TD says), getting below that cluster of support first at 105.58 and next at 105.458 would be needed. That would tilt the bias more to the downside and should see more momentum in that direction. 

Until then, the buyers are still in play and the sellers aren’t exactly winning the war.  

Now with the price near the lows for the day, the sellers are making a play. What would ruin that play?   If the price would trade back above the topside channel trend line currently at 106.10 (and moving lower), that would hurt the technical picture and have traders questioning the selling seen today.  

Sellers are trying, but they have work to do to prove they are really starting to win.  

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