100 and 200 hour MAs are criss-crossing as price action moves up and downAs the market prepares for Powell II at 10 AM ET/1500 GMT,and after the US data this morning, the USDJPY did tick up toward the high for the day and the 100 and 200 hour MAs. Those moving average have been criss-crossing over the last 5-6 trading days as the market price moves higher and lower.
The pair moved higher on Tuesday on the Powell testimony, but started to lose some of the luster as the stock market started to move lower. The JPY pairs moved sharply lower yesterday on lower stocks.
Looking at the hourly chart of the USDJPY, the fall picked up momentum on the break back below the converged moving averages (blue and green lines). The longs gave up on the move below and turned to sellers.
Today, the selling momentum could not be sustained and the data has helped reverse stock futures (stocks are in positive territory today). That seems to be giving the pair a boost. The price just moved above the 100 hour MA at 106.90 but has the 200 hour MA to contend with at 107.00.
I would expect the market to settle in near this area defined by the MAs (the 50% of the move down comes in at 107.104) and then let Powell do his thing. The market will be looking for 3 or 4 tightenings from Powell. Does he tip his hand more?
On Tuesday, he said that things were better than December when they earmarked 3, but reserved judgement until the Fed meets in March.
Will a Senator push him today? Will he volunteer his view? That is what to listen for today.