December 8, 2022

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USDJPY tests a swing area at 108.654 and finds risk focused buyers against the level

2 min read

Below the low of consolidation area from earlier trade

Yesterday, the USDJPY moved lower for the 4th consecutive day but stalled within a range between the 50% midpoint since May 11 at 109.06 (at the high) and a floor that developed at 108.828.  

Below the low of consolidation area from earlier trade

Today, the price continue to waffle within that area in the Asian session, but spite higher in the European/London session. That moved to the upside to the price back above its 100 hour moving average (blue line). 

However momentum cannot be sustained as stock started to tumble and risk off trading sent the flows back into the “relative safety of the JPY” (that is what they say).   

The price move back into the consolidation area (below the 200 hour MA and 50%), and the momentum continued through the low floor at 108.828 as well.  That level is now close risk for the shorts. Stay below and the sellers remain in firm control.

ON the downside, the low for the day did stall at a another swing area at 108.654. Not only was that level the last swing corrective low on May 12 before racing higher, but was also near swing levels on May 10 and May 11.  Buyers seem to be leaning against that level on the first look. However I would expect stops on a break below.  If broken traders will next I the 108.453 followed by the lows in May near 108.34.

In volatile stock markets (and add the crypto market today), the flows into and out of the JPY can be pulled in one direction or the other.  Latching onto a technical level can make the decisions easier. Of course the volatility can also chop you up along the way. Nevertheless, defining and limiting risk, and hoping for the best (traders make their own luck), could lead to quick trading gains if a swing move is caught.   

Right now, the Dow remained under pressure -515 points. The NASDAQ is coming off of it’s lows and trades down -155 points and nearer its intraday high.  

In bitcoin, the price is currently trading at $36,000 which is $6000 off of its low price at an even at $30,000.  That’s the good news. The not so good news is the high price was up at $43,591.70

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