Buyers had a shot earlier in the day but failed
As you probably notice, technical breaks can fail and those failures tell us something.
For example, looking at the hourly chart of the USDJPY above, the price at the highs for day broke above the 100 hour MA, and a trend line connecting recent highs (and even the high from Monday's trading too). That is a break that should lead to more upside momentum. IF you bought the break, it would be the right thing.
However, if a break with multiple reasons fails, that often leads to traders giving up and going the other way. That is what happened with the USDJPY earlier today, andand the price has been stepping lower.
What now?
Looking at the 5 minute chart below, the price correction in the NY session stalled near a topside trend line (see red numbered circles) - after breaking above the 100 bar MA (blue line in the chart below). The fall took the price below a lower trend line to new lows (see green numbered circles), and had it's own fail. The lower trend line reestablished support at green circle 3 and the price rebounded a little.
So a battle is on between the 100 bar MA above at 108.638 (blue line), and the lower trend line below at 108.47.
A move below or above the respective levels should give a push in the break direction. I give a small edge to the sellers (the trend today is more to the downside), but with a wary eye on the trend line below (need to get below it and may find support buyers near it) and the 100 bar MA above (don't go above it and ruin the sellers bias).
Join the conversation in our new Telegram group
This is the link: https://t.me/joinchat/HveypkdU1-wmyDHb8gddSA
