Technical Analysis

USDJPY mired in a narrow trading range

Last week run higher leads to sideways consolidation

The USDJPY raced higher last week with a range of about 172 pips. That came after the most narrow trading range since 2012 in the prior week (about 52 pips). Non -trend markets transition to trending markets and that is what happened.  

The last 2-3 days is back to the non-trend as the low to high trading range is stuck in a 43 pip trading range with a  high at 112.07 and a low at 111.63.   That low stalled at a swing low from Friday (see red circles).  The high today stalled so far, against a lower high that also has a number of swing levels (see green circles). 

At some point the market will crack and run but for now, I would look for the sellers to lean against the 111.98-112.07 area as risk can be defined and limited with stops on a break.  Let the spring get a little tighter before breaking.   

US stocks are trading above and below unchanged. US yields are higher by about 1.4 to 2.2 bps (not far from earlier levels).  Gold – an influence to the dollar (and visa versa) – is trading down $1.00. Not a lot of action there so far.  

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