Why is the area important

The USDJPY has been on a bull run. No denying that. The price reached a low off the election results at 101.18, and took off. There were technical hurdles to get above on the way higher - moving averages at first and then retracments and mainly swing levels from earlier in the year (follow the horizontal lines). They became targets and when broken, became support levels for traders to lean on corrections. That is the quick and dirty view by looking at the daily chart.

The rally extended above the 118.00 level and last week we reached a high of 118.658. That is a big move. Over 1700 pips in all.

So what stalled the rise? Anything important?

Looking at the daily chart, if you go back to Feb 2015 and look forward, there were a number of swing lows that stalled in the 118.06-51 area (red circles). Yes, there was a day in August 2015 where the price tumbled below the that floor and did not stop until 116.09 (PS the high on Dec 12, 2016 stalled at 116.11 before breaking higher on FOMC day. Why? Because of that low - traders leaned).

Then in January 2016, there was more value below that line before a final rally at the end of January/early February. That rally took the price to a final test of the 200 day MA (green line) on January 29th. That final test was the peak. The price moved back below the support area (at 118.06-50) and never looked back.

Why does that matter?

Because the 118.06-51 level mattered to traders for a long time. There were a number of times when traders tested it and bounced. Apart from two instances, it was support where traders defined and limited risk.

Fast forward to last week.

The price last week moved into that area and squeezed to 118.658. Yes we moved above the key area high at 118.51, but it did also run into a trend line that connected the highs from August 12 and Dec 17th. Looking at the hourly chart of the moves above the 118.51 level shows that the time spend above that key ceiling was limited.

After 1700+ pips, there is some cause for pause and the market stalled and corrected.

The correction - on Friday and yesterday - fell below triangle support (that was tested and held). Then marched lower yesterday. The low stalled at the 38.2% of the move up from Dec 8th, and started the move back higher. Getting above the 100 hour MA was a key development for the bulls.

What now?

We are back near the low level of the resistance area at 118.06-51. We are trading above and below that level over the last 8 trading hours. The market is stalling. It is extended. It is debating "sell here" or "buy here and take it through the ceiling".

This is the 5- minute look at the stall. The 100 bar MA has caught up to the price consolidation area. The high comes in at 118.20 and 118.23. THe low corrective price stalled at the 100 bar MA at the 117.81 level. We sit on the 100 bar MA now.

We are at a decision time for the pair on this chart too. DO we head below 118.00 or base here and go higher. On a move lower, the 117.75 and then the 200 bar MA become targets (at 117.686). The 100 hour MA at 117.51 is also key.