There are some small wins for seller in the USDJPY from a technical perspective:
- The price stalled ahead of a topside trend line yesterday on the hourly chart (see chart above) . The inability to get to the level is a small negative.
- The price fell below an upward-sloping trend line on the hourly chart above near 149.61
- The price fell below the 100-hour MA at 149.61
- The price run-up to extend above the 150.00 level, but only extended to 150.313 before rotating back to the downside.
- The move higher fell short of the 50% midpoint of the move down from the July high at 150.757 (see daily chart below).
- It also fell short of its falling 100-day moving average just above that level on the daily chart (see chart below).
Those are little chinks in the bullish bias that may be a downward clue.
What has not happened that would increase the bears control at least in the short term?
- The swing high from August 15 comes in at 149.356. The price has tested that level, but has NOT broken below the level (see 4-hour chart below).
- The price has NOT broken below the rising 200-hour MA at 149.242 (and moving higher). The price has not traded below that MA since October 2 (see the green line on the hourly chart).
The little breaks and bearish nuances are good news for sellers looking for more downside, but there is more work to do.
Nevertheless, if the price can stay below the 100-hour moving average 149.610 (and broken trend line at the same level) , the sellers have some hope for the start of something more/some more downside probing in the new week.
Fundamentally, if the BOJ sees more global stability. If China starts to show signs of bottoming or if China continues to stimulate. If the BOJ hints of more hikes to come, there could be a reversal. Also if US growth starts to weaken from strength or the Fed continues to recalibrate, the USDJPY can also correct lower (or reverse back down).