The USDJPY is only trading in a 27 pip trading range. The 22 day averages 78 pips. So there is room to roam and room to extend as markets and traders await the FOMC decision later this afternoon. Having said that there is a slow bullish bias developing.
Looking at the hourly chart, the lows for the week on Monday and again on Tuesday stalled right near its rising 200 hour moving average (green line currently at 113.509). The price action did trade above and below the 100 hour moving average about of significance in trading today is that the low for the day did stall comfortably above that moving average line – indicative of buying interest.
Additionally, the price has moved above a swing area between and 113.773 and 113.806. Admittedly, the price has moved down toward that level and even below it over the last hour or so, but is trading back above the level at 113.847 currently.
There is work to do on the topside the swing highs from number 29th and October 8 looming at 113.954. In addition, the 50% midpoint of the move down from the November 24 high comes in at 114.019. Getting above those levels opens the door for further upside momentum.
What would ruin this story?
In the short term, moving below the 38.2% retracement at 113.666 would be a tilt in the negative direction. However the biggest below to a bullish bias would be the price moving back below the 100 hour moving average at 113.584 and the 200 hour moving average at 113.509. That would be the dagger in the bulls heart going forward.
