Range still tiny at 39 pips for the day
The USDJPY is testing the 200 hour moving average (Green line in the chart below). That moving average comes in at 112.08. The high price just ticked to 112.09.
The range for the day is only 39 pips. The average trading range of the last 22 days for this currency pair is around 91 pips. There is room to roam (i.e. extend the range) but currently there is a reluctance against the risk defining moving average level.
The USDJPY has now corrected into the 38.2-50% correction zone of the move down from the May 10th high to the May 18th low. A move above the 200 hour MA would target the 112.30 level which is the 50% of the move down (see chart above). A move above that would have traders looking toward the 100 day MA AND 200 bar MA on the 4-hour chart at the 112.57 level. That too is a key level with both MAs at the same level.
Yesterday, the market buyers started to take some control (or sellers gave up on more downside) when the price moved above the 100 hour MA and then topside trend line (triangle - see chart above). The break trend line was retested, but found buyers too. The corrections problem is the move higher is more of a struggle. There is not a lot of "gotta have em" spirit.
Anyway, with a narrow trading range, look for stops on a break of the 200 hour MA, but don't be surprised to see some reluctance (i.e. sellers) against the MA level as well. WIth the range so narrow, there can also be reversal and move below the low.
US yields are higher but only modestly. The 10 year is up 1 bp to 2.2904%. We are trading at the high for the day. The low yield was only a few bps lower at 2.27%.
US stocks remain modestly higher. There is not a lot of push from those markets.
