Forex technical analysis: USDJPY looking forward to weaker stocks?

Technical Analysis

Author: Greg Michalowski | usdjpy

Stocks to open lower. Bonds yields lower too.

The US stock market is expected to open lower with the S&P futures down 6.00 points, Nasdaq futures down 5.25 points and the Dow futures down 60 points.  The lower bond yields are also a contributor to the fall.  
 

Then, of course, technicals has helped the sellers step the pair lower from Wednesday's high.  Since peaking on Wednesday, the pair has moved about 233 pips lower, stepping through -and holding below - technical levels along the way.  The next key step comes in at the 112.51-57. That area has been home to some swing lows/highs going back to mid January. Yes, the pair spent time moving above and below the level from Jan 31 to Feb 6th.  However, from Feb 6th to Feb 9, the price used that level as a ceiling before the break back higher on Feb 9.  It is back near that level. 

So far, the buyers are leaning. The low today reached 112.61. The last few hours have had the price peak against the 61.8% at 112.869. That was the high during the 8 AM and 9 AM hour.   A move above that level may take some of the pressure off the selling. 

Watch the 112.86-87 area on corrections.  Above that the 113.00 level. That was near the peak on the correction off the initial low in the London morning session (see chart below).   Holding the resistance level and that support level at 112.51-577 may be tested again. If you are looking to buy the dip, this is the dip level to lean against. 


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