Has a negative bias after the 38.2% retracement level held resistance in London trading
The USDJPY had an oversized 391 pip trading range yesterday as buyers took control and forced the price back above its 100 hour moving average. Stronger stocks, higher yields, lower gold helped the bias turnaround.
However, the late day rally did stall after breaking above a swing level from March 6 at the 105.73 level, and the price fell short of a topside trend line. Since then (today), the the price action has been down, up and currently back down. In the process, the price has moved above and below its 100 hour moving average at 104.502. Like the EURUSD, traders or looking for the next shove either higher or lower (but has a lower bias).
Looking at the hourly chart, the sellers are more in control below the 104.988 level (call at 105.00). That area is also a swing area going back to March 6 and March 10 (see red numbered circles). It also is a natural resistance level. Stay below, and I give the nod to the sellers. Move above and there should be more probing to the upside with the 38.2% retracement at 105.391 as a target.
On the downside, the low today came in at 104.089. That level and the natural 104.00 level will be the next targets. Below that the swing low from the New York session yesterday fell to 103.21.
US stocks are expected to open lower with the Dow Jones down -748 points and the NASDAQ index down -220 points (as implied by the futures). Although sharply lower from the close yesterday, those levels are actually higher than the premarket lows seen since the North American traders entered.
