Pair trades between its 100 and 200 hour moving averages
The EURJPY traders are looking for the next shove.
Looking at the hourly chart above, the price action today as been down up and back down again. The run lower initially broke below its 100 hour moving average (blue line in the chart above currently at 118.38) but ultimately failed.
The run back to the upside cracked briefly above its 200 hour moving average (and 61.8% retracement) at the 119.09 area.
The most recent move to the downside has found support against the aforementioned 100 hour moving average.
Given that price action (two fails and support holding), traders are a bit unsure of the next move. Hence the support buying against the risk defining level (i.e., the 100 hour moving average) on the second look.
I would suspect that traders will be focused on those moving averages extremes. If there is a break, they will go with a break and look for momentum in the direction of the move. Be aware. Look for the shove.
The market will be focused on fiscal measures from the US. Treasury Secretary Mnuchin is looking for stimulus that would be focused on small and medium-sized businesses. Yesterday chatter was focused on cutting the payroll tax, but it was met with mixed support as it would be expensive. Should there be a measure enacted that is bullish for stocks, we it's the move higher (dependent though). If stocks falter, we should see a rotation lower. However, let the levels and momentum tell story.
