The better Empire manufacturing helps to push the USDJPY up (for now at least).
The USDJPY moved down sharply yesterday and in the process fell back below its 100 day moving average. The pair also briefly moved below a floor area between 109.56 and 109.615. However the close was above that swing area.
Today, the price continued its decline and fell back below that swing area. This time the sellers pushed the price down through the August 19 low, the August 24 low at 109.479 and 109.407 respectively. The pair did not stop until reaching the August 16 and August 17 double bottom at 109.11. The low today reached 109.106.
The price has bounced off that floor helped by the better than expected Empire manufacturing index. That index has been bouncing around over the last 4 or 5 months. Nevertheless, it gave the buyers against the 109.11 level some added hope and support.
If the dip buyers are to increase their confidence, getting above the August 24 low at 109.407 and the August 19 low at 109.479 would lessen some of the bearish bias seen from the declines over the last two days.
Conversely, a move below the floor at 109.11 would have traders looking toward the 108.867 to 108.922 swing lows from August 3 and August 4.
US stocks in premarket trading are up modestly:
- S&P index is up 7.2 points
- Dow industrial average is up 14.43 points
- NASDAQ index is faring the best with a gain of 33.6 points. The NASDAQ is trying to snap a five day decline.
