The USDJPY tests a swing area (and 107.00 level)


Trades at a new session high

The USDJPY is stretching to a new intraday high at 106.972.  This is just above a swing area defined by some highs and lows going back to the middle of August at the 106.91 to 106.97 area. The 107.00 is also a natural resistance level as well.

Trades at a new session high

On Friday, the pair moved up to its 200 bar moving average on the 4 hour chart. That currently comes in at 107.131 (green line in the chart above).  If the pair is to look to build more upside momentum, breaks above the 107.00 and the 107.131 will be eyed by the buyers. 

Holding the 107 level, will have traders eying the 106.45 level. That level is the 50% retracement of the move up from the August low. The low from llows from last week stalled ahead of those levels (the low reached 106.477 and 106.535).

US stocks are lower but off session lows. The S&P is down -12.28 points at 2939.74. The low reached 2935.68.

The US yields are higher with two-year up 2.8 basis points and 10 year up 1.3 basis points.

Lower stocks can weaken the USDJPY (if things get outta hand), but higher yields can support the USD (and USDJPY).  So there are mixed signals (and the changes are relatively modest so far anyway).

SUMMARY:

The 106.97-107.00 area is so far stalling the rally off lows today.  A move above that area and then the 200 bar moving average on the 4 hour chart at 107.131 is needed for the bulls to take more control.

Absent those breaks, and the buyers today may tire and turn to selling (traders could sell against this area with stops above).  The 50% retracement 106.451 remains a key downside target to get to and through for a more bearish bias.  

ForexLive



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