Forex technical analysis: USDJPY tests a past ceiling area
The level comes in at 112.93. The high today reached 112.92
The USDJPY has been trending to the upside today.
Looking at the 4-hour chart, the pair moved above the 100 bar MA on the 4-hour chart at 112.47 and that has helped propel the pair up to other swing levels from the recent past (we trade in a range). The 112.82 level was the high from last week. Traders are trying to hold that level now.
The problem with continuing the upside is that above is there is another level at the 112.93 area. That level was a ceiling October 3, 4 and 5 (red circles 1,2 and 3) before breaking higher on US employment day on October 6th. That break higher failed however (red shaded area) and the market has traded below that "old ceiling" since that time (see red numbered circles). The high just reached 112.92.
The bulls are more in control. Interest rates in the US are up with the 10 year up 4.1 bps and trading at the high for the day. That is helping the pair. However, the negative (bearish) caveat to the run higher is that there is little in the way of a correction.
You can explain that because the buyers are overwhelming the sellers (see 5-minute chart below). The market is trending.
However, if there is profit taking against the ceiling here at 112.93, the price can start a corrective rotation back toward the 38.2% of the day's trading range at 112.619 AND the rising 100 bar MA on the same chart 112.599 (and rising). Those technical levels should stall a fall if one is started.
Right now there is the battle against resistance to contend with for the traders. If the buyers still love it, they will break that target. If not, a fall back below the 112.82 will be an early clue for a corrective move lower.