The USDJPY is keeping the bulls in charge.
Yesterday, the pair was setting up for a move lower. The downgrade from Moody’s led to a quick move up but a quicker move down. The price had moved below the 100 and 200 hour MAs but it was just before the US ISM which happened to come out pretty strong (see post from yesterday: Forex Technical Trading: USDJPY stalls the intraday fall on the on better ISM). So the sellers – below the 100 and 200 hour MA (blue and green lines in the chart below) – became buyers against the 100 and 200 hour MAs (see hourly chart below).
USDJPY has moved above the recent highs (118.96-119-12). This is the line in the sand on the break higher today.
In the Asian session today, the price got and stayed above the 100 and 200 bar MA (blue and green lines in the chart below) and the that has led to more upside momentum.
NY traders have taken the pair even higher, moving above the recent highs at 118.966 and those from yesterday at 119.01 and 119.12. The pair has corrected off the new high at the 119.266 but if it can remain above the 118.96/119.00 area, I think the buyers should be happy with a potential for further gains.
Stay above the 118.96/119.00 area will be eyed by traders today.
With the pair trading at the highest level since 2007, there is not much in the way of technicals to grasp onto. Looking at the weekly chart below, the high price from the August 5th week comes in at 119.82. The 120.00 level is an obvious natural target. The 120.149 is the 61.8% of the move down from the 1998 high (at 147.71). With little to grasp, staying above support, is a way traders can define risk. As long as the price remains above the support, the bulls remain in control. Watch the 118.96-119.00 for support intraday.
The USDJPY has the 119.82, 120.00 and 120.149 as upside targets now.
