200 bar MA on 4-hour chart at 108.35. 38.2% of the move up from October low at 108.334
The USDJPY after breaking below a lower trendline at the 108.56 area, has run below the 200 bar moving average on the 4 hour chart at 108.348 and the 38.2% retracement of the move up from the October low at 1.08334. Break. Break.. Break.
The move lower has now taken the pair down to test the 108.24 level which was the low price from October 23. In between today and that date was a move lower that saw the price bottom at 107.88 on November 1.
The run lower has been helped by:
- weaker initial claims today
- a weaker stock market
- continuation of the decline in US yields (10 year has fallen -7.6 basis points today)
The Feds chair's testimony was not much different than yesterday's.
One thing that may be concerning to traders and leading to a weaker dollar is that the Fed seems to be comfortable with the risks now that they have cut rates by 75 basis points. That is despite inflation still below target levels (at least from the core PCE data).
The rallying cry from Fed's Powell and other Fed members, seems to be that the economy and monetary policy is in a good place, with global risks such as Brexit, US China trade, slower global growth a concern.
Overnight we saw weaker China data once again, Germany barely kept that of recession with a 0.1% GDP growth, Japan at slower growth is well,. Australia employment situation was weaker. Is the Fed being too cavalier? Or are they right?
