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Title: USDJPY follows the risk off flow and yield declines

May 12, 2022 09:29AM ET

By: AnalysisWatch

USDJPY has been moving up and down since April 27. The high on that day was 131.246. On Monday, it reached a new peak at 131.342, but failed to gain momentum despite the breakout.

This week, the USDJPY price continued to fall, and today it fell even further.

The latest 38.2% upside (from the March 31 low) is at 127.495 (say 127.50), which is the pair's next technical downside target. Today's low is 127.956, so there is still room for a breakout until this level is reached.

On the daily chart, the next risk is the old monthly low at 128.60 and then 129.40 (the April 20 high and yesterday's low were also near this level). The current price is $128.207.

The pair has been trading above and below the 100/200-hour MA since Monday's failed high. Yesterday, prices rose after a higher-than-expected CPI, but stalled near last Friday's swing high and headed back down.

Today, prices fell below the 50% midpoint of the last upward move at 129.136. Last week's low at 128.615 was also broken (with a few ups and downs around that level-it's also the 61.8% level). In the last few hours, there was a drop to a new intraday low at 127.956. The area between 128.615 and 128.738 is now a narrow risk area (see the red numbered circles and the lower yellow area in the chart below). If prices can hold below that, sellers have the day under control.

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