Perhaps being a little cute, but it is a target

The USDJPY has trended lower in trading today. The move has been helped by some pretty good technical holds and breaks. Specifically, I liked the holding of the trend line at the highs yesterday ( see green circle 4). That put the lid on the pair. Then today, the price fell below the 200 day MA (after testing it on Friday and Monday). The price also fell below the lower trend line (blue circles).

The ceiling and the break got the ball rolling today and it has not really stopped.

BUT....

Looking back to the last time the price was down at this area right before the 1st round of the French election, the 109.18-22 area has swing levels that made a ceiling between April 13 and April 20 (see chart above). Yes the price moved above and below that level before the gap higher of the election results, but those red circles in the chart above are saying "we may stall against this level today. The range for the day is 123 pips. The average is 91 pips. So we are extended. This was a level that was a ceiling. Can it now be a floor?"

My reservation is this.... we are trending and trends go farther than what traders think. That is my rule. So if I do buy, I buy close to that 109.18-22 area and put a stop below it. In other words I don't mess with it for a lot of pips. Sellers are in control.

Drilling to the 5-minute chart, shows the trend move lower. The price at the highs at the close yesterday and into today was hanging around the 100 and 200 bar MAs on the 5 minute chart (see blue and green lines at the top of the chart below). The 200 bar MA (green line), kept a lid on the pair. Then the 100 bar MA (blue line) did the same. Finally the the 200 day MA was broken (green step line). You can see the ball getting rolling to the downside on that break, and it has been trending since then.

There was a sideways period that allowed the 100 bar MA to catch up to the price, but when tested, sellers came back in, and the last leg lower has occured.

What now? What would say the trend lower may be over?

The 50% of the last leg lower is at 109.50. That is now close resistance for the trend move lower. Get above and we could see another move to test the 100 bar MA (at 109.57). That MA will be key for any chance of a serious correction higher. IF the buyers cannot retake the 100 hour MA, then they really are not taking back control from the sellers. That 100 bar MA is at 109.57 currently and moving lower.