Below 50% midpoint retracements, but above the 200 month MA
The USDJPY last month got within 12 pips of the 2017 low price at 108.24 (the low for the year comes in at 108.12) and bounced. The month closed just shy of 110.00 (at 109.97). That close was lower than July's close but only by about 27 pips (the price closed at 110.24 in July).
For 2017, there have been 5 down months and only one month with a significant higher close. Two months were more or less unchanged. For the year, 2017 closed at 116.97. So for the year, the USDJPY is down about 6% (rounded). Bears are in control by that respect.
How does that stack up longer term?
If you go all the way back to the swing high from the 1998 at 147.21, to the swing low of 2011 at 75.57, the 50% midpoint comes in at 111.648. For me, the 50% midpoint is a swing level for bullish and bearish. If the price trades above, the buyers are more in control. If the price trades below the bias is more bearish. We currently trade below that midpoint at 110.00 at month end. More bearish.
What about over the last few years?
If you measured the move down from the 2015 high of 125.851 to the 2016 low at 98.887, its 50% midpoint comes in at 112.369. The price has traded above that level in 6 of the 8 months this year, but the last 6 months have closed below that midpoint level. More bearish.
Anything bullish?
The 200 month moving average comes in at 105.986 (call it 106.00). Since breaking higher in November 2016 (there were 5 consecutive months were the price traded below that MA in 2016 on it's way to the 98.887 low), there have been 10 months where the price closed above the key MA. That is more bullish.
Another potential bullish development is the double bottom at 108.12-24. Stay above and the sellers and buyers can fight it out in a more narrow range from 108.12 to the top 50% at 112.368.
SUMMARY.
Longer term - only looking at the monthly chart - the USDJPY technical bias is mixed.
On the bearish side:
- Lower on the year
- Below the 50% of the move down from the 2015 high at 112.368
- Below the 50% of the move down from the 1998 high at 112.64
On the bullish side:
- Above the double bottom at 108.12-24
- Above the 200 month MA at 105.986 (call it 106.00).
So there is a battle going on.
The close battle is between 108.12-24 and 111.64-112.368.
A wider battle would be down to the 200 month MA at 106.00.
Remember that the 50% midpoint range may be barometer for bullish above and bearish below, but the price this year has traded above that level for 6 of the first 8 months of the year. So it is important to stay above if broken. If broken the 115.55 is a strong technical target. It is the 61.8% of the move down from the 2015 high and also a topside trend line from the 2015 high. Key level.
For a look at the EURUSD from the Monthly chart only CLICK HERE.
