The pair closed below the 100-day MA for the first time in April yesterday
The breakdown of the bullish momentum/bias for the first time in April saw the floodgates open as the pair sank to a low of 110.81 where it tested the 200-day MA (blue line) before bouncing into the close.
The drop was exacerbated by the dollar's decline as well as poor equities performance once again. As we approach the holiday season, be wary of jumpy price action but I believe the 200-day MA should hold unless equities capitulate in the last few trading days this year. There is also further support near 111.50 so that will also help to provide an area for buyers to lean on for the time being.
But make no doubt about it, the break of the 100-day MA is rather significant as now it presents the opportunity for sellers to attempt further downside breaks.
As for today, look out for large expiries to help contain price action with a chunk of them at 111.00, 111.50-55, and 112.00. The ones at 111.50-55 are rather large and could prove to be a magnet for price considering liquidity conditions but in any case, look towards equities also as sentiment there will provide further clues to yen pairs on the day.
The Nikkei is modestly lower by 1.3% on the day while E-minis are down by 0.2% currently.
