Technical floor stops the fall. 100 day MA stops the moves higher
With geopolitical risk, typically there is a flight into the "relative safety of the JPY" (a Pavlovian reaction by traders). Last week we saw, the USDJPY move lower and indeed at the open today, the USDJPY moved lower on the back of the weekend saber rattling between the US/Iran. However, the price moved higher and started to build a base at the 107.909 area. That was home to some swing lows on Friday as well.
On the topside, however, the rally has been contained by the 100 day moving average currently at 108.164. The price tested that level late in the Asian session and also more recently in the London session. The price currently trades at 108.104.
As a result, technical levels are defining the trading range with 107.91 as a floor and 108.164 as the ceiling. Traders focused on the risk levels will look for a break of either extreme. Until then, it would not be surprising to see traders leaned against either side with stops on a break.
US stocks are expected to open lower. The NASDAQ futures are implying a -65 point decline. The S&P index is implying a 19.65% decline, and Dow futures are implying a near 200 point decline.
Spot gold is up by $23.32. US yields have dipped a little to the downside once again, with the 10 year down 1.7 basis points to 1.770%. The low reached 1.7586%.
Typically with stocks lower, bond yields lower, and gold higher, the USDJPY moves lower. Time will tell, but traders have the technicals to help define the bias and risk.