As outlined in the prior post (See: “Forex Technical Trading: USDJPY doing more watching today“), the USDJPY was showing bearish signs but the action was relatively tame (compared to say the EURUSD is more center staged today). The 100 hour MA was outlined as the next level to get and stay below for the sellers to be more comfortable. It seems the 100 hour MA and the low for the day at 117.34 and 117.40 respectively – the low came in at 117.37 – was a level the shorts were happy to buy some back. This suggests to me a reluctance and distrust of the declines.
USDJPY tests 100 hour MA and low for the day and finds buyers.
Now the good news for the sellers is the 117.930-118.00 levels did hold above over the last few hours. The 117.93 was the October 2007 high which has been a longer term target for the pair for a while, and which was broken this week. So traders short do have something to hang a hat on. However, as mentioned in the prior post, a move below that 100 hour MA would certainly give the sellers more comfort.
