USDJPY showing some signs of taking a break after yet another 6 year high.
The USDJPY moved to new 6 year highs over night. The price peaked against the underside of the broken trend line at the 109.448 level. This line was outlined first a few days ago in this POST. Sometimes, these old solid trend lines come back “into play”- especially in a market that is searching for a level to lean against, and there is not much there. This line was good support in early September before a small correction led to the break. Today the sellers used it to define and limit risk. Nice. Nice.
The price decline as taken the pair below the 109.09 level. This too was a strong trend line in early September (see blue circles). Recently, the price has consolidated around the level (well yesterday). Today, the price move above, tried to stay above, but broke back below. That line should now be a resistance area on rallies today for patient sellers. I don’t expect the price to move above this area in the near term (risk level).
USDJPY corrects lower after making yet another 6 year high.
Looking at the 5 minute chart below, the price shot up in the Asian session and has been rotating lower since that move found the sellers. The price is back below the 100 and 200 bar MAs. Those MA are converged and come in between the 38.2-50% of the move down today. This area should find patient sellers if there is a correction higher today. The 109.09 level should be the stop on sales in this area. Targets below would be the 108.436, the 108.124 and the 100 hour MA (blue line) which is rising but is at 107.86 ( do not expect to get all the way there though today).
The trend has been up in this pair and the targets talked about at the 110.00 to 110.67 area are still a possibility going forward (2008 high is at 110.67 and 110.00 is just 110.00). However, looking at the high reached today, and the subsequent sell off, it could be time for a breather (let the 100 hour MA catch up). Be patient though. It is a Friday.
The 108.91-109.01 should be a sell zone on rallies today.
