The USDJPY made new month lows as the wander down continues. The price reached the month high at the 80.09 level 5 days ago. This was 5 pips short of the 38.2% and since that time, the price has rotated back down. The low today reached the low from the end of June at the 79.12. The level also corresponded with bottom channel support on the hourly chart below.
The next key target/test for the pair comes in at the 78.98 level where the 200 day MA is currently located (green line in the chart above). Since the end of May, the price has traded and closed below this MA only 4 days (the last time for a single day). A move below should solicit further selling in the pair (if the BOJ allows it).
On the topside today, resistance comes in at the 79.26-30 area. This is where the 100 and 200 bar MA on the 5 minute chart are found (blue and green line in the chart below), and trend line resistance. Stay below and the bears remain in control – keeping alive the potential test of the 78.98 200 day MA level.
Putting the USDJPY into perspective is the fact the pair is mired in a non trending range. The range for the month is a scant 96 pips so far. Admittedly, there is plenty of time left in the calendar month but it highlights the possibility for an extension between now and the 31st..
Looking back at the history, the most recent and most extreme narrow range was 132 pips in December 2011. The next lowest in 2011 was 175 pips So there is room to roam on a break. Should the range stay below 132 for the month, it would represent the most narrow trading range since May 1990 when the range was 90 pips. That’s a long time ago.
