Today’s trading session saw the USDJPY experiencing notable fluctuations. The currency pair recorded a low of 141.425 and a high of 142.46. Notably, the high price neared the 200-hour moving average, stopping just 10 pips short at 142.56.
A pivotal moment occurred yesterday when the USDJPY fell below its 200-day moving average, closing beneath this key level for the first time since May 16th and reaching a new low since July 31 at 140.959. Additionally, the price dropped below the 38.2% retracement of the 2023 trading range, marked at 142.475.
This position below both the 38.2% retracement and the 200-day moving average is a significant indicator for traders, suggesting that sellers are maintaining a strong grip on the market. A reversal above these levels, however, would signal a shift in momentum and could disappoint sellers.
On the daily chart, the USDJPY is currently trading within a swing area, ranging from 141.504 to 142.07. Although there was a dip below the lower boundary of this range today, it lacked the momentum to sustain a further decline.
Overall, the key for sellers will be to keep the pair below the 200-day moving average and the 38.2% retracement. Sustaining these levels as a ceiling implies continued control by sellers and potential for further downward exploration. If, however, the pair breaches these levels, it could lead to a change in market dynamics, with sellers possibly turning into buyers in response to this unexpected development.
This article was written by Greg Michalowski at www.forexlive.com. Source