It is all about Yellen today...
Today is all about the Yellen testimony. The key will be if she signals a potential March hike. The market is not expecting it. We know the Fed is penciling 3 hikes for 2017. Will she be more itchy about doing something sooner vs later? That bias in her words will be eyed by traders.
The USDJPY has moved back down to the 100 bar MA on the 4-hour chart at the 113.246 level The price opened above that MA on Monday and has stayed above it since then. Today. however, the lows for the day retraced modest gains from yesterday, and has come right down to that moving average line. In fact, the MA line has been tested on three separate hourly bars today and each time there has been a bounce. That line will be a barometer for bearish through the testimony. Move below it, and the bias is more negative. PS the 100 hour MA is also not far away at 113.153. So in reality, both MA lines will be the bearish line in the sand through the Chairs testimony.
ON the topside, the close from yesterday was at 113.733. The early Asian Pacific trading saw the price move above that level (see 5-minute chart below), and later in the session, the level (and the 200 bar MA - green line in the chart below), put a lid on the pair. A move above that level will be more bullish. Closer in, the 200 bar MA has stalled rallies twice today. So it will be a close bullish barometer for traders. Further higher the 114.26 is the 38.2% of the move down from the January (also 2017) high. The high yesterday got to 114.16 before backing off.
