USDJPY falls to 77.00 level on weaker US Data

The USDJPY moved sharply lower on the weaker US data today in addition to Washington budget issues. The price has found support against the 77.00 level with trendline just below this key level at 76.96.  The low in March came in at the 76.41 area in fast market conditions. At the time, the market was reeling from the “idea” that Japan exporters would need to repatriate funds back to Japan (selling dollars, buying yen in the process).   In March to stop the fall, global central banks came into the market and sold Yen (bought USDJPY).   The hardship on the country from the devastation of the Tsunami and nuclear disaster warranted the concerted effort. I do not think that concerted effort will be found now.  Today, the dynamics are different with the dollar weakness dominating.

The price bottom at 77.00 is a logical level to pause.  Traders will be eyeing the correction – marking the 38.2% of the move down at 77.255 as a level to get above that would take some of the sting of the decline away from the sellers today.   Failure to move above this level keeps the pressure on the pair.  Keep an eye on the level.