Little changed from Friday’s trading
The USDJPY is waffling between retracement levels today (and 4-hour MA levels too).
The 50% of the move down from the May 21st high to the May 29th low comes in at 109.749. The high today reached 107.76. Also near the high at 109.80 sits the 100 bar MA on the 4-hour chart.
The 38.2% of the same move lower comes in at 109.361. Also near that level sits the 200 bar MA on the 4-hour chart at 109.39 currently. The low for the day reached 109.365. The pair closed on Friday at the 109.49. We currently trade at around that level.
So the traders seemed to have found a range – albeit a narrow one – for the day. The high to low range is only 39 pips. The average over the last 22 days (about a month) is 71 pips.
With the range so narrow (56% of what is normal), it makes sense that the pair would extend at some point today. Which way?
Drilling to the 5- minute chart, the price action today is sideways to down. The high from Friday, was taken out. The price momentum could not be sustained (failure).
The price move lower and took out swing lows from Friday and the 200 bar MA on the 4-hour chart. The price momentum lower could not be sustained (failure).
That is very symmetrical. So it can be a toss up.
In between sits the 100 and 200 bar MA on the 5-minute chart and a trend line at 109.55-56. If the buyers can push above that level, perhaps we see a run back toward the highs (the dip buyers at support today get more confidence).
If that level stalls the rally, there could be another run to and through the low support.
Let’s see what happens and if the stock opening can give the market a kick. US factory orders at 10 AM ET.