Holding will be key for dip buyers
The USDJPY spent the last 3 days of the year moving lower. In the process, the price fell below its 200 day MA (green line at 108.662) on December 31. That was a more bearish move by traders technically.
Today, the price of the pair traded above and below the key MA level earlier in the session (see overlay green line on the hourly chart above) but moved off that level to a high of 108.859. Upside momentum stalled and the the price started to move back lower in the London morning session.
The pair just retested that 200 day moving average level (the low dipped to 108.649 just below the MA level at 108.662). Buyers stalled the fall. The pair trades at 108.70.
Can the 200 day MA level hold support now? That will be the key level for both the buyers and the sellers in trading today.
If the level can hold, the high for the day followed by the 38.2% retracement of the move down from the December 26 high at 108.927 will be the next targets as the corrective move back higher continues.
If the level is broken, traders will be targeting the low price from Tuesday's trade at 108.462. Below that level, traders will be looking toward the 100 day moving average which currently comes in at 108.129 (not shown).
