The USDJPY is trading mixed today as it trades between the 100 and 200 hour MAs (blue and green lines in the chart below at 106.51 and 106.97 respectively). Today, the initial bias was lower as the price found sellers against the 200 hour MA (green line at 106.97 currently) and the 38.2% retracement level (of the move down from the October high at the 106.985).
USDJPY sits between the Goal posts as defined by the 100 and 200 hour MAs (blue and green lines).
The subsequent fall in the Asian session and into the London session, saw the price extend below the 100 hour MA (blue line at 106.51 currently). It looked like the sellers were to take control. However, with traders looking for more downside and not getting it, the price moved back above the 100 hour MA and traders covered on the disappointment.
Now, with the market trying to extend above the 200 hour MA (green line) yesterday and failing, and today with the push below the 100 hour MA (blue line) and failing, the pair has positioned itself between the two MA’s waiting for the next pop. Is it going to be up? Or is it going to be down?
Looking at the 5 minute chart, the price for the pair is showing a touch more bullish bias at the moment.
- The price is above the 100 bar MA (blue line). Moreover, the pair tested the MA line and held on two occasions recently (see blue line in the chart below)
- The price is above the 50% of the trading range today.
Note that there is event risk at 10 AM as US Existing Home sales are to be released at 10 AM .
USDJPY is trading above the 100 bar MA and 50%.
It is ok to wait and see what the market decides (or to see what the Existing Home Sales data says – estimate is 5.10M vs 5.05M for September). Remember, it is not you or I who will move the price, but the “market” (mainly the big boys) who will make the push At this time, the market is not sure. That is evident from the price action. At some point though, the price will make up it’s mind and move away (with momentum) from this non-committed area. Look for the break to initiate the trade. Then look for the momentum away. If we get it, you can expect a trend-like move. If it does not come, and the price reverses back above/or below the break area, get out. Take a small loss but continue to look for a move away.
