The USDJPY is extending the trend move to the downside and has extended to a new session low. In the process, the price has moved below its 50% midpoint of the last trend move higher from the July low to the November high. That midpoint level comes in at 144.572.
Earlier today, Bank of Japan Ueda hinted of a policy change in 2024 (moving off of its negative rate policy). That sent the JPY higher (the USDJPY sharply lower – as well as all the JPY cross-currency pairs). However, support at first held against the 50% midpoint.
The newest move lower crashed through the midpoint level, and will now have traders looking toward 143.880 (was a swing high from early August). Move below that level and the 61.8% retracement of the same move higher from the July low at 142.841 is the next major target on the daily chart (see chart above).
Although the pair got a shove lower from the fundamental news, the 100-day moving average at 147.452 acted as a resistance level this week. Staying below that moving average kept the sellers in play. The fundamental news helped to push the price lower, and in the process increased the bearish bias technically. Sellers are more control.
What might give buyers some feeling that a bottom is in place?
Looking at the 5-minute chart below, the trend move has taken a new step to the downside from the 145.29 high to the 143.78 low. The 38.2% – 50% retracement area comes between 144.36 and 144.538. The 50% midpoint on the daily chart is at 144.57. Staying below that area would keep the sellers in control, and keep the trend move lower intact. Move above, and there could be some further short covering/short term profit taking.
Until then, the sellers are in firm control.
This article was written by Greg Michalowski at www.forexlive.com. Source