USDJPY trades in a narrow range and waits for a push

Technical Analysis

Author: Greg Michalowski | usdjpy

Trades in a 20 pip range

What's the good news about a 20 pip trading range for traders?  The expectation that it won't stay that way forever. That is there should be an extension. How far it extends is unknown but average range over the last month (for the low to high range for a day) is about 49 pips.  

Trades in a 20 pip range

So what technical clues can we get from the charts?

Looking at the hourly chart, the high in the Asian session stalled near some low levels from Friday (before breaking lower) at 111.624.  The 61.8% of the move down from the March high to the March low comes in at 111.588.  Get above each would be more bullish and should solicit more buying.

On the downside, the 100 day MA, the 200 hour MA and 100 hour MA all come in at 111.42-47.  A move below those levels should solicit more selling with a break of the 100 day MA at 111.318 even more bearish.  

In between those extremes is where all the price action took place today in up and down choppy trading.  Traders are unsure of the next break but will be looking for a catalyst.

Typically a help to the USDJPY are stocks and yields. Both are now higher with the Nasdaq up 0.53% and the S&P up 0.40%.  For yields they are higher but off their day highs. The 10 year is at 2.597%, up 1.1 bps. The high reached 2.6087%. The low reached 2.5835%. So trading in the middle of the day's range. 

Gold is higher by 0.25% at $1305.91. Higher gold tends to weaken the USD.  

So the related instruments are a bit mixed. 

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