Risk defining lines being tested
The USDJPY is moving higher and is approaching a cluster of resistance levels including:
- The 50% of the move down from the June 24 high to the low reached yesterday at the 123.15 level.
- The 200 hour moving average at 123.207, and
- A "remembered line" that dissects an upper extreme and a lower extreme going back to June 10 (see red horizontal line in the chart below)
The pair should find resistance seller with close stops above.
What might make shorts cautious is the close from last Friday was at 123.79. That gap has not been filled. As a result, a move above this area, would give traders a more bullish technical picture that may lead to increased upside momentum. The 123.438 is the next target on a move above 123.207.
On the downside, a move below the 100 hour MA at the 122.93 will give sellers comfort. Other support targets come in at 122.58 area now (see chart above).
