Kuroda comment low
Last week, BOJ Kuroda sent the USDJPY on a tailspin after saying the currency was weak enough. The pair tumbled to a low of 122.45. Back on May 26th a corrective low after a surge higher came in at 122.44. So is it a comfortable area? Yes. The low today is 122.418.
Now yesterday, we broke below an upward sloping trend line on the Yellen/Fed more dovish tone (see 4 hour chart above). That got the ball rolling to this target area.
The combination of the break and now finding the lows has traders taking a break for a review of the landscape. When that happens, you can roll in to something closer to see what the traders are thinking and doing in the shorter end. The 5 minute chart is showing a channel which has recently had the top line broken. The 100 bar MA (blue line) is still keeping the ceiling in place though. As a result, the buyers below against the low, are probably ok, but they would like to see a bit more to give them some more comfort. A move above that 100 bar MA would be step 1. Above that the 50% of the days range and the 200 bar MA (green line) are lining up at the 123.00 area. That might cap the action if it can get that far.
The dip best buy has come and gone. Now we get more into the levels that show the buyers want to take back more control. That becomes more difficult after the break lower yesterday but it is one step at a time. And the 1st step is the 100 bar MA.