Forex technical analysis: USDJPY falls below swing level/floor

Technical Analysis

Author: Greg Michalowski | usdjpy

New low for the trading day

US stocks are starting to give up gains. The Dow which treated as high as 24534 is now down at 24369, up 140 points.  The Nasdaq composite index is now down 40 points or -0.59% and looking to test the lows at 6798 (currently trading at 6807). The S&P index is up 5.5 points at 2647. It is just off the lows at 2646.60.


The fall in stocks has helped to push the USDJPY below a swing area/floor at the 112.63 – 65 area.  That area has been home to a number of swing highs and lows over the last two trading days (see 5-minute charts above).  

The 38.2% of the days trading range comes in at 112.43. That would be the next target on the downside if the price selling is to continue on the break.   Other targets come in at MA levels  and the 50% retracement.   

Giving the technical picture more of a bearish view, is that the last corrective move higher stalled right at the 200 bar moving average on the 5-minute chart (green line in the chart above). Staying below, kept the sellers more in control and helped the wander lower.

So sellers are taking a little more control. The pair still remains well above the close from Friday at around the 112.18 area.  So it is not a disaster for longs.  However, the inability to keep the buyers in control intraday may be weighing on some of the longs (and especially those who got involved from the long side today).  They may be thinking about getting out and reevaluating.