Risk aversion trade sends JPY higher (USDJPY lower)
The risk aversion trade today, has investors moving into the "relative safety" of the JPY.
Looking at the daily chart above the high for the day stalled near its 200 day moving average at 108.66 (the high reached 108.63 today). The run lower has seen the price cracked below its 100 day moving average at 108.152 on it's way to a intraday low of 107.908. The current price is trading at 108.102. Traders who are short would love to see the price remain below that 100 day moving average. PS the fall below the 100 day moving average was the 1st time since October 10.
Staying on the daily chart, the low for the day did stall just ahead of the low price going back to November 1 at 107.88. On October 31 the low was 107.92. With today's low at 107.908, traders seem to be leaning against that swing low level as a support. Just below that is the 38.2% retracement of the move up from the August load to the November high. That level comes in at 107.704. Those are targets on more weakness in the pair.
If the price can move back above the 100 day moving average (and shows some upside momentum, watch the 108.422 swing low from December. Above that is the 200 day moving average at 108.66.
Drilling down to the hourly chart, the price action today did see a lower trendline broken on 2 separate occasions. The inability to stay below that line may give the buyers some thoughts of "the bottom is in" after the sharp fall. Watch the momentum on a move above the 100 day moving average. That is the bias clue in the early hours of tradng now.
