Trades below the 38.2% retracement of the move up from the October low
The USDJPY his train to the lowest level since October 12 after breaking below the 38.2% retracement of the range since the October 4 low. That level comes in at 113.211. The current price is trading at 113.146.
The move below the 38.2% retracement also takes the pair outside of the up and down trading range which confined the pair between the 38.2% retracement on the downside, and the swing high from October 20 at 114.69. A lower swing area came around the 114.50 area over the up and down time period (see green numbered circles).
Recall from Friday's trade, the price spiked up after the US jobs report, and that spite higher took the price briefly above its 100/200 hour moving averages (near converged). The move above was quickly reversed, and buyers turned to sellers forcing the price down into the lower swing area between 113.21 and 113.396.
The pair did move higher in the Asian session today in a reaction to holding the 38.2% retracement, but has rotated back to the downside and trading lower in European and early US trading.
Going forward, stay below the 113.21 retracement level is the most bearish. However, shorts looking for more downside would likely feel comfortable below the 113.396 level now (top of lower swing area - red numbered circles).
The USDJPY sellers are making a play and taking the pair finally outside of the Red Box that has confined the range over last 3-4 trading weeks.
The next downside targets come in at 112.996 (the swing low from October 12), followed by the 50% midpoint retracement of the move up from the October 4 low at 112.754.
