Moving toward 50% midpoint of move up from Feb
The USDJPY is trading at fresh day session lows and looks to approach the 50% retracement of the move up from the Feb low, at the 120.12 level (see chart below).
Looking at the four-hour chart above, the price of the USDJPY broke below the 38.2% retracement of the same move and the 100 bar moving average at the 120.567 level. That got the ball rolling to the downside for the pair. This will now be a risk defining level for the sellers.
Should the support at the 50% not hold, it will open of the door for further downside potential with the next target being 119.83, followed by the 119.67 level. This level should be a touch nut to crack as the:
- 61.8% retracement is at this level
- The rising 200 bar moving average is also moving toward that level (green line in the chart above) and
- There is trend line support as well (see blue numbered circles)
The USDJPY has been more reluctant to follow the dollar lower (as stocks are rallying) but rates in the US are also moving a little lower, which makes it a bit easier. Watch the 120.12 level.