Up and down activity continues
The last 5 trading days has seen the USDJPY alternate between up and down days. Today is an up day. Yesterday's close came in at 103.49. That close was right around the 100 day MA (today comes in at 103.42). Not only has the price moved up and down over the last 5 trading days, but the pair has also traded above and below that MA on each of the last 5 days.
The high over that time extended up to 104.155. That was short of the September high at 104.31 which remains a key level to get to - and through. The low reached 102.80. That low was right at the swing high from September 21. If the pair is go lower,that become a key level too.
Having defined a clear top and a clear bottomed, the up and down action says the market is unsure of the direction. So it swings back and forth and waits for a shove.
A couple things that keeps the trading skittish is that US yields are rising on increased chances of a Fed tighten in December, and that should help the USD, but stocks are also under some pressure (the S&P closed just below the 100 day MA yesterday and is targeted for a lower opening today). That seemed to hurt the USDJPY and JPY pairs.
That may be continue to be the dynamic going forward. Bond traders are marching up yields (let's face it, they are still quite low) and stocks get scared about a Fed move too. If the market starts to price in a hike, the Fed won't be so chicken to act (fear from a "surprise" weighs on the Fed, and the market has not taken a tightening as being a serious consideration). What does the stock market do? If the stocks can stay steady, that would favor the upside.
