Price moves back below the 200-hour moving average
The dollar is losing a little bit of ground as the yen remains one of the better performing currencies still - being bid in the crosses as well. The trading session so far has seen USD/JPY push and pull around the 200-hour MA (blue line) for the most part but sellers are now looking for a break back towards the downside.
Fundamentals still favour a higher USD/JPY after the BOJ softened its guidance in its latest meeting while the dollar index remains fairly robust boosted by solid growth prospects in the US economy.
However, that is only one part of the story and one of the more obvious plays for the pair right now is the wedge that is forming on the hourly chart. The downside of the wedge has been tested a couple of times in trading and has held so far, so that will again be the key for any further move lower in the pair.
That support level currently sits at around 111.20. As with all wedges, the trade would be to go with the break. And as for shorting, a break of Friday's low @ 111.10 would give more confidence to the trade I would reckon.
