USDJPY trades nearer recent lows.

The BOJ in the new trading day. The FOMC is tomorrow. So that combination makes trading this event even more difficult. As a result, there is a chance that the market races one way and comes right back. So be careful. It is already a tough enough decision to figure out the price implications. It seems that most think that the USDJPY is going lower and a move below the 100.00 level is on the horizon. The technicals are more bearish currently with the price remaining below key MA levels and trend lines as well. It means nothing except the market is more bearish. The buying and selling will determine whether that bias remains that way.

So what are the key technical levels that might switch that bias around to more bearish, or what would be the targets on the downside that would be steps for further declines.

Looking at the 4-hour chart, a move lower would target the following levels:

  1. 101.34 to 101.41. This represents recent swing lows and the 61.8% of the mov eup form the August 15 low.
  2. 101.16. This is near swing low on September 7 and swing high on August 17.
  3. 100.68. This is the swing low from August 2nd. In Mid August the price traded above and below this level (after breaking lower) but from August 24 to August 26, the pair kept a lid against this level (the highs in that period stalled at 100.61 so it seems sellers were leaning).
  4. 99.94-100.00. Swing lows and the 100.00 level.
  5. 99.50. The low from August 16th. A move below that level will open up a run toward the 99.00 level and the Brexit lows.

To head all the way down to the lower levels, I think would be difficult ahead of the FOMC. But if the Japan stock market gets hammered and the market perceived Japan investments abroad will need to be liquidated and there would be a flow of funds back to Japan, perhaps things get unraveled. How that JPY strength helps the Japan economy, I don't really know but that would be the story.

ON the topside, the targets would be:

  1. 101.91. This is the 505 of the move up from the mid August low and near the topside trend line in the chart above 1B. 102.05-19 (not shown). This is the 100 and 200 hour MAs.
  2. 102.479. The 100 bar MA on the 4-hour chart is at that level.
  3. 102.79 area. This is near swing low and highs from August 2, September 2 and September 15
  4. 103.046. High from Sept 9th
  5. 103.35. Hiigh from September 14.
  6. 103.97-104.00. High from September 1st and 104.00 big figure level and low from July 26th
  7. 104.31.. High from September 2nd
  8. 104.528. 100 day MA. The price has not been above the 100 day MA since early February.

Those are the step levels that make sense to me. Given the Fed tomorrow and other influences risk will be sky high. I would not be surprised to see one of the above levels to be tested and the market reversing (either higher or lower). The stock market reaction will play a part too. So be aware and understand that the risk is high...high.....high.