Forex Trading: USD/JPY And Yen Crosses All Advance Today

The USD/JPY along with the Yen crosses all advanced today as a report out of Japan showed that Japan investors increased their purchases of Foreign Bonds and Stocks last week.  The total of bonds purchased increased to 641 billion yen versus a scant 12 billion last week.  The increase was the largest in a month.  They also increased their purchase of foreign stock to 76.8 billion from 0.4 billion yen.

In other news the Japanese retail sales fell by 2.9% from a year ago which although better than expected was still the 8th straight month of negative growth compared to a year earlier.

Finally, there was general  flight into the riskier assets like NZD, AUD which led to sharp gains in yen crosses across the board.

The data and risk appetite led to a lower demand for Yen versus all currencies.  From a technical perspective the USD/JPY continued the rally away from the 100 and 200 hour moving average. Yesterday, the price action tested the 100 hour moving average and bounced higher - breaking  through the 200 hour moving average  in late NY trade. The action trending higher from there.

The move higher in early trade was also influence by a move back through the 100 day moving average on the daily chart (see daily chart above).  The 100 day moving average comes in today at the 95.42 level.  Yesterday the price tested the level but backed off at the close.  When the price moved through the level in early trade, buyers emerged and the momentum started to build on itself.  The data was sufficient enough to give the pair the extra boost needed for further gains.

Now the pair is approaching the 200 day moving average which comes in at the 97.37 level.  Keep this level in mind.  The market should see profit takers against this level.

On the downside there is support between the 96.57 and 96.77 area where the market stalled on the way up and held intraday corrections on the way down.  The 100 bar moving average on the 5 minute chart also comes in at the 96.71 level currently.  For the trend day to continue, these levels should find the intraday support.

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