Fast break the other way on trade deal hopes
The USDJPY in the early Asian session was able to take out the flash crash low from way back on January 3rd at 108.87. The low reached 104.438. The earlier low from August was also broken at 105.047 today on the early session fall. The low for the day was near a lower trend line on the daily at 104.48. The high today is still short of the high from last week at 106.73 (high reached 106.40 so far) and the swing low from June at 106.773. Each are target on the topside going forward if the buyers are to take more control.
I certainly am happy the low for the year is now not some liquidity void that created an “artificial” extreme (PS. I am using Bloomberg’s low. There may be other lows but I choose to use theirs).
Drillling to the hourly chart below, the early fall cracked the old lows in the 104.87 to 105.045 area. The move back above the area swung the bias around. The run higher ultimately crossed back above the 100 and 200 hour MAs (blue and green lines) only to quickly reverse back below those levels (at 106.336). It will take a move back above the converged MAs to increase the bullish bias for the pair.
What levels below would shift the bias back down?
What the 105.58-69 to provide support. That area is home to swing levels and the 50% of the move down from Friday’s high, to the low today (at 105.584). Before that, watch the 105.854 level which is the broken 61.8% level.
Stocks are getting ready to open with gains.
US yields are near unchanged levels now after trading lower earlier.