Do traders want to be so bearish?
If you look at the USDJPY, the price action is back and forth today and really over the last few weeks as well.
Currently, the price is trading more toward the low extreme over that time period. It is also below the MAs I (and the market) tends to follow. The closest is the 200 bar MA on the 4-hour chart. That comes in at 101.727. The 100 hour MA is at 102.09. The 200 hour MA is at 102.189. The 100 bar MA on the 4-hour chart is at 102.499. All those are above the current price. So the bias - technically - is bearish.
Now we do have BOJ and the FOMC decisions coming up of course. Typically, going into risk events, the market likes to not be too one way. That is, the price will not be at an extreme but somewhere between bullish and bearish. Being below all the hourly MA is more bearish.
That can happen. However, if the sellers feel a bit uneasy, they may cover a bit and move the price back up toward the 102.189 area (for example) where the 200 hour MA is found and the 38.2% of the last move lower. From that point, the market will be more in balance between bearish (below the 200 bar MA on the 4-hour chart at 101.727) and more bullish (above the 100 bar MA on the 4-hour chart at 102.50).
What would that take technically to start that process? Well I would need to see is the price of the USDJPY get above - and stay above - the 200 bar MA on the 4 hour chart at the 101.727 level.
IF the price can get- and show it can stay above that line - then maybe....just maybe....traders can trade and push the price up toward those higher MA and make the market more neutral into the events.
Until then, however, who is in control? The sellers. They may like that position going into the BOJ/FOMC meeting. To me, it would make me nervous. If they are nervous, it should lead to some short covering but not before we can show the price can stay above 101.727.
PS. I do not recommend positions into the CB decisions.
