Today's selloff covered 203 pips, well above the 20-day average of 152 pips, indicating an oversold move that likely contributed to buyers stepping in early. The key question now is: What could slow the downtrend and give sellers reason to hesitate?
150.03 – The 200-bar moving average (5-minute chart). USDJPY has breached the 100-bar MA intraday (blue line on the chart below) currently at 149.72 today, but remains below the 200 bar MA key level at 150.03. A sustained break above the 200 bar MA on that chart is needed to signal the first small victory for buyers.150.17 - 150.25 – A key swing area that must be reclaimed to build bullish momentum. See red numbered circles and yellow area on the chart below)150.321 – The 38.2% retracement of the latest downside move, which would further strengthen buyer confidence.
As long as USDJPY remains below these resistance zones, sellers remain in control The buyers may be more in play (not getting overwhelmed with trend selling). A failure to break back above 150.033 would likely keep downside pressure intact, with 149.39 and 149.08 as critical support levels.
This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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