Forex technical analysis: USDJPY falls below support floor

Technical Analysis

Author: Greg Michalowski | usdjpy

2nd try after yesterday's fall failed

The USDJPY is latching on to the dovishness from Fed's Evans and has moved back below the 112.20-316 area. That area has been home to a number of swing lows going back to September 27th. The pairs price did break below yesterday on it's way to a low at 111.98 but reversed and moved back higher. 

This is the 2nd break.  Stay below the yellow area and the shorts remain in control. Move back above and it says to me, traders are not into doing too much. 

On more downside, the 200 day MA at 111.816 will be a tough nut to crack. Expect to see buyers near the level with stops on a break below. 

PS. The USDJPY - sans the failed break higher after the employment numbers on Friday and the failed break yesterday - has been trading in a 105 range over the last 11 days.  That is where the vast majority of trading has taken place. That is very narrow and suggests traders are unsure of the next move.  At some point (it may be right now), the traders will decide up or down. The break below now is an important test to gauge the selling. If it fails, the pair could give up on selling and push the upside. The 100 hour and 200 hour moving averages at 112.599 and 112.666 are upside targets.