Technical Analysis

USDJPY trades to lowest level since September 23. What would keep the selling going now?

USDJPY moves toward the next key target areas

The USDJPY has moved to a session low of 141.79. That is just above the swing low from September 23 at 141.73.

Below that level is the 38.2% of the move up from the August low at 141.15, followed by the key (and rising) 100 day MA at 140.735. The last time the price tested that key 100 day MA was back on August 2. The price bounced off that MA level and started the trend move that ultimately peaked at 151.938. That high was the highest level since 1990. Ahead of that MA is the 50% of the move up from the August low. That comes in at 141.155. A low from September 22 comes in at 140.308.

All those levels

  • 141.73 – low from September 23,
  • 141.15 – 50% of move up from August low
  • 140.73 – 100 day MA
  • 140.308 – low from September 22

Are the next downside targets.

Needless to say the lower CPI has the dollar selling momentum going (it was a binary event). Stocks are higher with the Nasdaq now up 5.57% on the day. Yields are lower with the 10 year yield down -27 basis points at 3.86%. The 2 year is down -29 basis points at 4.33%.

Taking a broader look at the USDJPY, looking at the monthly chart, the USDJPY low for the year from January was at 113.46. The move to the upside took the pair up over 3800 pips. That is huge. So there is room to roam to the downside.

As a guide, the 38.2% of the move up from the 2022 low comes in at 137.24. That would be a minimum target if dollar selling becomes more and more entrenched. It certainly is not out of the question. It is important to keep that perspective.

Having said that, that is down the road. What is ahead of us (that we can see) , is the 100 day MA and the swing levels on the daily chart from 140.30 to 141.73. Get below and stay below those levels, will open another downside door for the USDJPY.

Conversely, hold and the sellers are not taking back the control that they need to do to give the sellers more confidence.

USDJPY on the monthly chart

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