The 105.98 to 106.06 area create the floor area
The USDJPY is moving lower and trades to a new session low of 106.12 in early New York trading. That has the pair moving closer to the floor from May and June. The low in May came in at 105.984. The low in June came in just above that level at 106.067. Needless to say traders will be interested in that area. Risk focused traders may look to lean against the level with a stop on a break below. Sellers looking for more downside would love to see the level broken with momentum.
Staying on the daily chart, the price action this month has seen nearly all of the action below its 100 day moving average (blue line in the chart above). However the price action has been limited and narrow. Today however the pair is making a bigger break to the downside.
Drilling to the hourly chart recall from an early post around this time yesterday, the USDJPY was mired in a 16 pip trading range. However, as often happens,. Today the price Non-trending transitions to trend and that is what we have seen in this pair
Today, the price has fallen below a low floor from the month at 106.629-66 area. The run to the downside, saw an intraday correction to the 38.2% of the move lower (at 106.436) but stalled. Sellers remain in control (see chart below). Getting above technical levels like the 38.2% retracement will be needed to give buyers more confidence.
The USDJPY is at an important crossroad on the daily chart and the 105.98 to 106.06 area. If that level can hold, we should see a corrective rebound. However focus will be on how far the correction can go to see if this trend move to the downside is broken.
