Buyers make a play, but can they keep the control?
The USDJPY continued the rally started yesterday. Looking at the hourly chart below, the price tested the 100 hour MA in the Asian session and cracked above that MA level (blue line) in the London morning session.
The rise moved above the 38.2% retracement but fell short of the 50% at 113.25 currently (and the declining 200 hour MA – green line at 113.343). The dip in the NY session on the back of lower durable orders, tested the 100 hour MA. There was a dip below the line but only by a few pips. That MA line currently comes in at 112.877. It will remain a barometer for the bulls/bears in trading today. Move below, and the buyers should be inclined to think about getting out.
Taking a longer look at the daily chart below, the high today stalled ahead of the swing high going back to July. That high came in at 113.169. The high today reached 113.143. If the USDJPY is going higher getting above that level and the 113.38 level should open up more upside momentum (yellow area in the chart below).
On the downside, if the bias turns more bearish (gets below the 100 hour MA on the hourly chart), a trend line at 112.20 and the 100 day MA at 112.073 are key barometers for the bulls and the bears. Back in August, September and October, the price moved below the 100 day MA intraday, but closed above the MA level by the close. So sellers could not sustain a bigger move lower. Traders will continue to use the MA as a key borderline to get and stay below IF the price is to continue lower. Absent that, the bulls will remain more dominant.