The market still fears the 150.00 level in the USDJPY. There was a run above at the start of the month and a quick 280 PIP move back to the downside. This week, there was a 100 PIP tumble in a minute of trading on another BOJ fear schism.
Technically, move above the 150.00 level, and the price goes higher. The technical bullishness is enhanced. However, it doesn’t come without risk from the central bank either from currency intervention or a surprise policy change that kicks the JPY higher (and the USDJPY lower).
Having said that, the 100-hour moving average has done a pretty decent job of trying to hold support. That moving average was broken on 3 separate occasions this week. Each break could not last more than an hour. The 100-hour moving average comes in at 149.755 and moving higher. The 200-hour moving average – which is another target to get to and through to increase the bearish bias – comes in at 149.518.
In the new trading week, getting below each of those is important from a technical perspective for the sellers.
If I were to characterize liquidity risk, a long position – even though the technical bias is higher – would be greater for buyers. There just is too much liquidity risk from a sharp move lower.
In this video, I outline the levels in play and the risks.