Pair runs down to 111.22 before running back higher in early session trading
The USDJPY moved lower at the 5 PM ET open and moved to a low price of 111.22. That took the price below the 38.2% retracement at 111.242. However, the price has quickly rebounded. The pair currently trades up at 111.48.
Looking at the hourly chart, the pair last week broke out of a 9 day trading range on Wednesday at 110.129 and raced higher. The fall in US stocks and yields on Friday (Nasdaq -1.79%, 30 year yield moved to all time lows) took the wind out of the bulls sails a bit. Having said that, the price remains above its rising 100 hour moving average at 110.94 (and only corrected to the 38.2% level today (and bounced). So not is all bearish from a technical perspective.
Taking a broader look at the daily chart, an old broken trend line from last week cuts across at 111.56. That may be early resistance. If the price can remain below, there could be a further rotation back to the downside. On the downside watch the 110.95 to 111.06 as a barometer for the bulls and bears. That area was a gap going back to May 3 and May 6 weekend. That Was filled on the run up on Wednesday last week.
