The USDJPY has been in a 87 pip trading range for the entire month (10th trading day today). The average daily range last year for the pair was 68 pips. This highlights the inactivity seen in the pair. Moreover, this is the 9th change in direction over the 10 days of trading as traders grapple with bull or bear feelings. Last night the minutes of the BOJ July meeting signaled that they were considering ways to expand stimulus.
The move overnight has pushed the pair back above the 100 and 200 hour MA and into the wide channel. The support trend line on the hourly chart, now comes in at the 78.47 level. The 38.2% of the months range is at 78.449 and the 100 and 200 hour MAs come in at 78.39-41. This is the support levels for today’s trading. Look for buyers on dips against this area with stops on a break below 78.39. Stay above and the bulls remain in control.
On the topside (the bias is bullish) the next target comes in at the month high levels at the 78.73, 78.76 and 78.78. The 200 day MA comes in at 79. 167 today. Keep this level in mind should the price continue to rally.
Last month, the weaker Retail Sales saw the USDJPY move down about 32 pips in the first couple hour and a half of trading, before rebounding the rest of the day.