The USDJPY is running to the downside with mumblings about intervention. The price is trading toward the July low at 160.446. The low price has just reached 160.87. Looking at the hourly chart, the move up from the early May low to the high price seen just last week comes in at 160.56. That’s just above the July low at 160.446. Getting below those levels would then target the 100 day moving average at 160.107. The price last traded below the 100 day moving average on May 14. Below that is a swing area down to 159.733 and the 50% midpoint of the same trend move to the upside at 159.503.
Earlier today, the USDJPY finally broke below both its 200-hour moving average and the upward-sloping trendline near 163.36. That technical break shifted the near-term momentum to the downside and may have provided Japanese officials with an opportunity to reinforce the move if intervention remained a consideration. Since then, the pair has steadily checked off key support levels, with the decline extending to 160.31.
The next major downside target is the 100-day moving average at 160.107, which is now within striking distance. That level is likely to be a formidable support zone on the first test, as longer-term buyers may look to defend it. Whether the pair can break through that moving average or instead stages a corrective rebound should help determine the next directional move.
Yields have come off their high levels with the 10 year trading near the low for the day but still up 3.7 basis points at 4.659%. The 2 year yield is down -1.4 basis points to 4.221%. Stocks are moving to the upside with the NASDAQ leading the way with a gain of 2.14%. The NASDAQ 100 is doing even better at 2.66%.
This article was written by Greg Michalowski at investinglive.com.