...but the upside is also contained
The USDJPY has moved lower in trading today. Yields are lower with the 10 year down 2.7 bp to 2.442% . The low reached 2.431%.
The fall took the pair to a key support area.
- The low on Tuesday stalled at 112.067. The low today reached 112.046. Pretty much a double bottom.
- The 38.2% of the move up from the November election low is also in the area at 111.98. (see daily chart below).
So that 112.00 area is a good support.
Looking at the hourly chart, the pair's correction off the lows, stalled at the 112.51-56 area. That corresponds to the swing lows from Jan 18 and Jan 24th. Staying below that area keeps the bears more in control, but there is a mini battle going on.
Remember we do have the key employment report tomorrow. The ADP was much stronger. The Fed has earmarked 3 tightenings in 2017. So there may be some caution to the downside on the back of stronger Fed policy.
On the other side, Pres. Trump may continue to pester Japan on the trade situation (can happen at any time). As a result, that may limit upside moves in general.
For now, near support, with intraday close resistance defining the range for now.