The USDJPY has pushed higher off of trend line support and the 100 hour MA holding support earlier in the day (see chart below). The move higher took the price above trend line resistance on the same chart at the 118.47 level. That is around where the price trades now. Technically, the break is bullish and the holding of the lower trend line and 100 hour MA is also bullish. Is the market racing away. No. Does the market have a huge reason to go higher beside technicals? If the focus is Japan, perhaps. If the focus is the US stocks getting hit again and the FOMC statement, maybe not. The moves might just be from the "flows".
What levels are important technically through the FOMC decision?
ON the topside (a more hawkisk Fed):
- 118.854-87 There were three highs on Friday and Monday between these levels. In addition, the 38.2% retracement of the move down from the Dec 18 high comes in at 118.85. So a key level to get above and stay above.
- 119.44. This is the 200 bar MA on the 4 hour chart. It is the smaller stair step green line in the chart above.
- 119.75. This is the 50% of the same move down (from the Dec 18 high). Reaching this level would imply a 170 pip trading range for the day. That might be ambitious.
On the downside on a more dovish Fed:
- 118.18-118.23 (and moving higher). This is the 100 hour MA and trend line. This morning the MA was lower and the price moved a touch below it, but there was the trend line right behind it which held. Now the levels are higher as they both are sloping higher. They will be higher at 2:00 PM too. But traders will need to see the price move below and stay below after the decision.
- 117.88. This is the 100 bar MA on the 4-hour chart (smaller stair step blue line in the chart above)
- 117.709. This is the 200 hour MA. Yesterday, the price dipped to this level and bounced higher.
- 117.18-36. A number of swing lows and swing highs. A move below the 117.18 would represent 140 pip trading range for the day (given the current high).
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