Fed to purchase bonds and mortgage backed securites
In an attempt to lessen the blow from the impact of the coronavirus, the fed slashed rates to 0.0% to 0.25% and said they would purchase $500B of bonds and $200B of mortgage backed securiites.
The USDJPY is trading to new session lows as stock futures trade down -4% from Friday's closing levels in early trading.
Looking at the hourly chart above, the USDJPY has moved toward a swing area at the105.91-106.09 area. That area goes back to March 5th. On Tuesday and again on Friday, the price peaked in that area.
On Friday, the area was broken and the price raced higher toward the 200 day MA at 108.23, and a channel trend line just under that level. The high from Friday, helped by the rising yields and soaring stock market into the close, did stall, however, and the pair closed below both the trend line and the 200 day MA.
The swing area test now is the first major downside target for the pair. If broken, traders will shift focus toward the
- 38.2% of the move up from the March 9 low at the 106.697 level
- The 200 hour MA at 105.33, and the
- 100 hour MA and 50% retracement of the same move up from last week's low
Sellers are leading the way to the downside so far today, but have technical targets to get to and through to shift more of the bias more in the direction of the sellers.
