The USDJPY ping pongs between the 100 and 200 day MAs. Waiting for a shove.

Technical Analysis

Author: Greg Michalowski | usdjpy

100 day MA above and 200 day MA below

The USDJPY is trading lower in sympathy with lower stocks, lower rates today (at least that is the reaction today). Yesterday, stocks were higher and rates were marginally lower and the USDJPY moved lower. So there is some uncertainty with the correlation between rates and stocks and the USDJPY pair in the near term.  The standard the Pavlovian reaction is if stocks and bond yields move lower, the USDJPY moves lower too.  

100 day MA above and 200 day MA below
IN any case, the low has found support buying near the 200 day MA and 38.2% of the move up from the March 9 low. Those levels come in at 108.292 and 108.407 respectively.  The low for the day bottomed just below the 200 day MA at 108.23. Close enough. Dips buyers used the level to stick a toe in the water. 

On the topside the 100 day moving average at 109.01 is providing resistance. Like on the downside support, the price did peek just above that 100 day moving average up to 109.062. Close enough.

We currently trade between the levels at 108.724.

The "market" is looking for a shove in one direction or the other. 

It is Friday. We know the weekend bring increasing risk.  As mentioned above, typically if the stock markets unravel, and yields move lower, the USDJPY (and JPY pairs) move lower and visa versa.  Traders will get a clue from the MAs as to whether that Pavlovian reaction remains true (on moves either up or down today).  Move above the 100 day moving average is more bullish. Move below the 200 day moving average is more bearish. 

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