Runs into first resistance target at 50%

Yesterday was month-end, concerns about Trump, some meh US data. Today fear is less, stocks are higher and that ADP report knocked it out of the park.

The USDJPY has reacted to the upside as a result and we made new day highs. We also have almost erased the entire losses from yesterday's trading. The pair closed at 113.77 on Friday. We just printed 113.725. Almost there.

The bearish technical news, however, is we have stalled right around the 50% of the move down from last weeks high (profit takers or new shorts?). That has stalled the rally and is taking some of the fun out of the bullish move higher. We have now retraced more than 50% of the ADP spike higher.

Anyway, the rise today took the pair back toward overhead targets defined by retracements and MA lines. So there is some tough points to get through above.

  • 113.718. As mentioned this is the 50% of the move down from last week high. IT stalled the rise so far but remains a level on the topside to get through.
  • 113.866. This is the 200 hour MA (5 day week starting at 5 PM ET on Sunday)
  • 114.07. This is the 100 hour MA
  • 114.22. This is the 100 bar MA on the 4 hour chart AND the underside of the broken trend line on the hourly chart above (follow red circles). The old neckline from Friday's head and shoulders comes in near that area.

Any clues from the 5-minute chart?

Looking at it, the ADP spike, has retraced below the 50% of the move higher. That is not what you want to see, but it could be reactionary off resistance hold above. It has also moved below an area where there has been some swing levels intraday going back to Friday. That comes between 113.44-49 (see yellow area). Most of the day has been above the 100 bar MA (blue line). A break of that line would really be bothersome for the bulls. That would not be bullish.

What now? If the price can claw back above the 113.49 level - and stay above that yellow area - the buyers should return. Watch for more buying down here. Then the market will have to deal with the overhead hurdles ahead.