Forex technical analysis: USDJPY floor is set

Technical Analysis

Author: Greg Michalowski | usdjpy

200 day MA and 100 hour MA

Let's review:

  • The USDJPY fell below the 200 day MA on Friday. 
  • On Monday, the price peaked above the MA line in early trading but quickly moved lower.  At the end of the day the price had moved back above the MA line.
  • Yesterday, there was a fall back lower with the continued fall in US yields (low reached 2.16%).  The 10 year got close to the 38.2% retracemente yield of 2.13%
  • Today, US yields are higher (2.20%) and the USDJPY is back above the 200 day MA at 108.78. It is also above the 100 hour MA at 108.75 (blue line just below the 200 day MA line - green step line).

Those MAs are now the floor for the USDJPY today (risk for longs). Stay above and buyers in control. Move below and it is more bearish... again (hands go up in frustration from the ups and downs).  

Yes...I am trying to see bottoms in the USDJPY and the 10 year as well.  The USDJPY has been following US yields. So if support holds there, it should help the USDJPY.  BUT I am defining risk on the USDJPY still and those MA lines make sense to me.  If we hold a further upside exploration can unfold with the:
  • Trend line at 109.11
  • High yesterday at 109.22
  • 109.44 is the 38.2%, and
  • 109.50 (and moving lower) is the 200 hour MA.
as the next targets. 

So the floor is set for the USDJPY. Can it hold above the line and keep the buyers in charge?