Bouncing
The USDJPY tumbled with the price moving to a low of 104.90. That fall took the price with smelling distance of the 2018 low at 104.60. We closed at 108.87. Big crash.
The rebound has been pretty substantial as well.
If you put a Fibonacci retracement of the trend move down from the NY afternoon high to the low, the 50% midpoint of the move comes in at 107.183. The corrective high moved to 107.35. We currently trade right around that midpoint level.
Now, when you have a 420 pip move lower in minutes, trading becomes more of "horseshoes and hang grenades" type of market. However, I like to measure the 50% midpoint as a level where if the sellers really love the downside, they should come in around that level on the rebound. Putting it another way, traders who were caught and lived through a 420 pip tumble, feel ok at only 1/2 the loss. So watch that level.
On the downside, the 38.2% of the same move lower on the hourly chart will be eyed as a level to get below. The low on the current bar has stalled right at that level too.
Again with the volatility, the market can race higher and lower. The 50% AREA can act as a barometer for bulls and bears. Other retracements can also surface as levels to eye as well (like the 38.2% at 106.646). What we try to do is judge the market flows through the price action and the tools. If a pattern develops, traders can look to use the levels as risk defining level. But whatever you do....BE CAREFUL. Risk is at red hot levels.
