Redundant...I know. But the 123.78 area is stalling the pair today
The USDJPY has had some swing lows at the 123.78-80 area going back to July 31 (see chart below). Yesterday, the pair fell below that level to a new low at 123.68 but closed the day right at the 123.78 level. The correction higher - into the European early hours - held just below the low from Monday and Tuesday at the 124.17 level (see green numbered circles).
The pair then proceeded to head back down to test support at the 123.78 level, and bounced off that level, not just once but now twice (the recent low just touched 123.80).
So the USDJPY pair is finding support ...at support. Needless to say, if the bearish momentum is to continue, moving below and staying below the level will be needed.
On the topside keep a close eye on the 124.00 – 07 area. This is the 38.2 to 50% of the move down from yesterday's high (note the high from yesterday stalled right at the 200 hour moving average - green line in the chart above). If the price to remain below this area, the sellers remain in control. Traders who are short, will still want see that break below the key 123.78 level.
On a break the next target will look towards the 123. 41. This is the 38.2% of the move up from the July low. Below that the corrective low from the end of July comes in at 123,00. The 50% of the move up form the July low comes in at 122.84.
Later this morning existing home sales for the month of July will be released with expectations at 5.43M annualized pace vs. 5.49 AM. Also, the Philadelphia fed business outlook for August is expected to show a small increase to 6.5 from 5.7
