A little flow into safety trades today
US stocks are lower, yields are lower as well, and gold is up. That can be a recipe for declines in the USDJPY as the Pavlovian reaction is for a flow into the "relative safety of the JPY".
Looking at the hourly chart above, the pair has been waffling down and in the process the pair is now trading below a swing area at the 108.64-68 area and the 50% retracement at the same 108.681 level. Can the price stay below in trading today. Shorts would love to see that area become a ceiling for trading today.
On the downside, there is some decent support at a lower trendline at the 108.55 level. The price did the below that level on 1 hourly bar (see green circle 5) but the last 2 tests have stalled right at that trendline. A move below should solicit more selling with the 61.8% retracement level at 108.492 another hurdle to get to and through. Get below that and the downside opens up more from a technical perspective.
Take a look at the daily chart, the price is also back below the 200 day moving average at 108.986 (the price moved away from it in trading yesterday and again today). That is a bit bearish. The 108.413 is the 50% retracement of the 2019 trading range. I guess we have to add that to the levels to get to and through for a more bearish technical bias.
