Volatility goes with geopolitical tension

The USDJPY sprinted lower yesterday. Then sprinted back higher and by the close, it was sprinting back lower again (see hourly chart below).

In the Asian session, the move lower was extended. The pair reached a trend line on the hourly (red circle 4), and bounced. Then fell below the trend line not just once but twice. The high correction price on the break stalled at the 109.84 area. That was the lows from August 3rd and 4th. Staying below would have been more bearish....

BUT

The price could not stay below, and the sellers covered on the failures.

That type of price action, comes with the territory when geopolitical stuff happens. You just don't know which way the wind with blow next.

So traders tend to keep a short leash on the trades at technical levels. If the price continues the run, all is happy. If the price does not continue the run, the trades are closed/reversed. Today, the trades were closed/reversed.

The reverse took the price back to the 110.10-23 area and stalled there.

What is the significance?

Looking at the daily chart, I am hanging on to the area as a bullish above/bearish below level. Going back in time, there has been a number of swing levels in that area (see red circles).

The high corrective price off the failed breaks today stalled at 110.16 (between the two extremes). I guess, geopolitical fear subsiding stalled the fall... but not all the way. There is still some fear and the area is keeping a lid on the rally for now.

So going forward, watch the 109.84 on the downside for support, and then the old trend line on the hourly at 109.73. On the topside, a move above 110.10-23 would be more bullish.