Thinking about employment/Fed
While the EURUSD moved higher on some wiggle from ECB's Draghi.. The USDJPY is moving higher on rates inching up. US stocks are up too (although that has not been a big catalyst of late).
The USDJPY trades near the highs for the day at 114.93. That was close to the Feb 15 high at 114.95. Guess what? That level needs to be broken and stay broken in order to move higher.
Also above is the 50% of the move down from the Jan high. That level comes in at 115.09. Add the 115.00 natural level of resistance and there is a good ceiling for sellers.
Now, the story about rising US rates is a compelling case to buy the USDJPY. That is supportive to the pair. US 10 year is up to 2.58%. The 2.61% was the high point back in December.
However, but there is also the Japanese quarter/year end (their year end is end of March) that has traders thinking that there will be a cap on the gains as exporters repatriate funds back to Japan. That dynamic MAY keep traders leaning on rallies.
However, just because there is a story line that might suggest there will be sellers on Japan year end repatriation, that does not prevent the price heading higher first (or perhaps the selling interest in USDJPY gets done).
So we as traders have to respect the price action and the tools applied to the price action. If there is a break of the topside targets (and they are good levels), it could run. The odds of 4 hikes is moving higher after all in the US. Also remember, that you can always sell a failure of a break (if they run the stops and fail).
So if you think 115.00 is a sell, have your stop on more momentum above 115.09. We never do know how the story line will play out. We only know the technical levels that should slow a move. If those levels do not slow the rally, then buyers are winning against the sellers even though the story line says they should not. So pick your spots,but be sure to define your risk too.