The drop yesterday was arrested by the 200-day moving average (blue line) but we are now seeing price fall back below the key level as the dollar retreats slightly ahead of the Fed. That level is now seen at 135.33 and will be a key point to watch, alongside the 2 December low at 133.61 in terms of defining any further downside leg towards 130.00 next in the aftermath of the Fed.
The recent bounce seems to have stalled around the 23.6 Fib retracement level of the downswing since October, seen at 137.94. As such, buyers need to clear above that to try and wrestle back some momentum in targeting 140.00 next.
For now though, the dollar remains rather vulnerable as outlined here and with a less hawkish Fed anticipated, it might be reason enough for sellers to go chasing their next move later in the day.
But again, any move in the yen needs to be weighted against the bond market and in interpreting broader market sentiment in the coming sessions, it may not be so straightforward.
