The USDJPY got a boost overnight. More talk from BOJ about doing all it can to get to 2% helped as did the inability to muster any downside momentum yesterday. The trend higher continued with new year highs being made and the pair trading at the highest level since October 2007.

The price did rotate back lower and was trying to keep below the close from yesterday at 114.63 and the 200 bar MA on the 5 minute chart below (green line), but the better US initial claims and the tumbling EURUSD helped send the pair back higher. The pairs rise is stalling a bit – the focus is more on the EURUSD. Watch the 114.814. If the price moves below this level, there should be a move and re-test of the 114.63-65 level.

The USDJPY could not keep the lid on it.

The USDJPY could not keep the lid on it.

Looking further out, the price of the USDJPY remains well above the 100 hour MA (blue line in the chart below). That level comes in at the 113.683 level currently (and moving higher).

Although the buyers remain in control this week, the momentum has slowed a bit (the channel is up but flatter than the surge last week). The high reached today did find sellers near the topside channel trend line (see chart below). The lower channel trend line comes in at 114.09 and if the shorter term momentum starts to fade, this would be the next key support target. Below that, the 50% of the move up this week (there is a gap below) comes in at 114.03. The combination of the trend line and 50% at similar levels, makes this a key support target on a dip. Expect buyers here.

The 61.8% and the 100 hour MA (blue line) are the next targets at the 113.68 level

I would expect that if there is a correction, these levels will each put up a fight as the market seems sufficiently bulled up. However, it is the surprises that we don’t plan on. So traders can use the levels as a roadmap for the corrections.

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