USDJPY consolidates as traders await Fed speak

The  USDJPY  is seeing up and down price action today. Nevertheless, the price is higher (although it’s trading nearer lows for the day). The price has also been able to stay above its 100 hour moving average today at 130.023. The high price reached the highest level since April 29 at 130.80. The low price was at 130.10.

Technically, it would take a move back below the 100 hour moving average at 130.023 in the USDJPY to tilt the bias more to the downside. If that level can be broken, a move below the 200 hour moving average (green line in the chart above) at 129.62 (and rising) would help confirm the high is in place at least for now.

On Wednesday and again on Thursday, the price moved below that 200 hour moving average but could not sustain downside momentum. The 200 hour moving average today is near the 38.2% retracement of the move up from the April 27 low at 1.29597.

Having said that, unless the price can get below those levels starting with the 100 hour moving average, the technical bias in the USDJPY still remains in the favor of the buyers. Moving back above 130.544 and then the high price today at 130.80 would increase the bullish bias and have traders looking toward the cycle high from last week’s trading at 131.246 (and a 20 year high).

Today, much will depend on Fed comments and price action in the US debt and equity markets. Yesterday the US yields moved higher helping to support the USDJPY, after the sharp decline on Wednesday after the FOMC decision. Yields have started to give up their gains and trade near the lows. The 10 year is now at 3.067%, unchanged on the day. The 2 year yield is down -7.1 basis points at 2.651%.

The stock market declines are starting to lean toward a flight into the safety of the US yields. Stock declines may also start to impact the economy.

Higher yields. Slower housing growth. Employment situation easing from recessionary fears. Lower stock prices could be what is needed to correct some of the inflationary pressures from supply-side trade above $9 today to a new cycle high. Corn futures reached a new cycle high of $8.24. Wheat futures are around $11.12 which is still sharply above the February low of $7.40, but off its high price of $13.63.