USDJPY: Remains between the 100 and 200 day MAs into the new week

Bounced off the 100 day MA on Friday

As the new week begins, the USDJPY continues to trade between it’s 100 day MA below at 108.652 (blue line in the chart below), and it’s 200 day MA above at 110.188 (green line). On Friday, the pair moved down to test the 100 day MA after the weaker than expected employment report, but stalled and rebounded into the close. The price is trading at 109.05 in early trading. 

Staying between the “goal posts” as defined by the 100 and 200 day MAs are indicative of a market that is unsure of the next directional move.  At some point there will be a break and run.  Until then, the buyers and sellers will lean against the extremes. It is best to listen to the up and down technical clues during this type of market. 

In between the two MA on the daily is the 50% midpoint at 109.66. 

Last week that midpoint was broken on Tuesday to the upside, but by Thursday, the  pair was cracking back below.  In the new day/week, keep an eye on the level for sellers on a test.

Drilling to the hourly chart below, ahead of the 109.66 sits some other technical levels of equal importance. 

Specifically, the 200 hour MA (green line in the chart below) comes in at 109.32 and the 100 hour MA at 109.457. The 100 hour MA is also near another key area from 109.45-53. That area (higher yellow area in the chart below), was a swing area up until May 1, when it broke above that ceiling area.  

On May 3rd, that move above failed and the selling started to gain more downside momentum.  So in addition to the 200 hour MA, the 100 hour MA is the area up to 109.53. After that minefield, the 109.66 midpoint on the daily will be targeted.  

Needless to say, the road higher has some roadblocks.  

SUMMARY:

The good news for the USDJPY is the levels are well defined.  

The 100 day MA is the key level on the downside. A break below that low, opens the door for more downside this week. That will give the sellers more control on a break.

On the topside, there are a number of hurdles that will been to be broken with 200 and 200 hour MA and a key swing area up to 109.53 potentially stalling the rallies. Those levels can also ignite a rally too. 

So let the price action tell the story. The technicals are telling us to put our trading and bias feelings aside and to just listen to the price action and the technicals.  .