Intraday correction finds support buyers
The NY session trading for the USDJPY first saw a dip below what should have been a bearish level (120.83 and 100 and 200 bar MA on the 5 minute chart - see below). However, support buyers came in against the 120.67 level (see prior post) and it has sent the pair higher since then.
The pair just had the largest correction of the move higher, but found support buyers against the 38.2% retracement level at 121.126. The price is back at 121.30. If the price is to go lower on a more dovish FOMC minutes, a move below the 121.04-12 will be eyed. That would take the price below the 38.2%- 50% retracement of the trend move higher, below the early European session high at 1.21088 and also likely below the 100 bar moving average on the 5 minute chart (blue line in the chart above). This would be the minimum that would suggest the climb higher is losing some momentum, and the bears/sellers are taking back at least some control.
If the pair is not able to move below these support levels, the bulls will remain in control. On the topside, the next targets would include the year highs from March. Those levels come in at 121.55, 121.66 and 122.01. The high price in 2014 came in at 121.84. All those levels should give buyers cause for pause, but breaking them could also lead to continued short covering in the pair. This week we've seen a break above a key trend line (see 4-hour chart above) and a break above the 3 month trading range (at 120.68 – 120.837 area).
