Test of the MAs above failing.
The USDJPY trades to new session lows, falling below the early early Asian low at 111.148. The low just reached 111.11. The fall comes after the pair tried hard to break above a cluster of MAs including the 100 and 200 day MAs at 11.36-38 and the 100 hour MA at 111.37. The 50% of the move down from the high last week is at 111.42.
The high did reach above all those levels at 111.46, but that was quickly reversed. That rejection and failure has contributed to the recent run lower.
What now?
Well, I give the nod to the shorts, but we also trade in the middle of the resistance above from 111.36-42 and the support below at 110.878-94. Thar area is home to some swing levels (see red numbered circles). So although the nod may go to the shorts on the inability to take the price higher, the selling is not running too hard/too fast. Things could easily turn around from here. Putting it another way, I would prefer to sell higher (closer to the MAs at least with stops on a break above) and hope for the sellers to keep the pressure on.
In related markets.
- Yields are tilting into the red now after being higher earlier. The yields are down about 1 bp after the slightly lower CPI. Lower yields can be more negative for the USDJPY
- The US stock meanwhile are higher from earlier levels which can be supportive for the USDJPY.
So not a lot of help there. Wait....
