USDJPY chops around
The USDJPY pair is best described as "surveying the economic/political landscape" and so far, can't decide which way to go. Typically the pair gets going (lately at least), which risk on or risk off flows. If stocks tumble on economic or political news (and yields fall too), that is time to buy the JPY (sell USDJPY). If the opposite is true, it is time to sell the JPY (buy USDJPY). Today with all balls in the air (including the new play in the UK), the pair is just stymied.
The range today is 24 pips.
Technically, the 105.639-695 area (yellow area) has been a floor for trading. A move below that area and then the 50% midpoint of the range since Friday at 105.584 would give the sellers more control. The 50% level stalled the fall yesterday.
On the topside, the 61.8% at 105.854, and then the falling 100 hour MA (blue line) at 105.939 (and moving lower) are the upside targets to get back above (and stay above).
Stocks are now open with modest declines (off the pre-market lows). It is not impacting the USDJPY so far. Yield are lower with 2 year down -3 bps and 30 year down 4.4 bps currently.
