Sellers could not get below the May low in trading yesterday and buyers returned
The USDJPY is rebounding higher in trading today and currently trades near the highs for the day.
Looking at the 4 hour chart of the USDJPY, the pair broke lower yesterday. In the process it fell below a upward sloping trendline at 106.72, and also below a swing area in the 106.35 – 44 area. Bearish.
However, the run to the downside took the price within 8 pips of the May low at 105.978. The low price reached 106.067 and quickly rebounded. The moved back higher was able to get back above the aforementioned swing area (see yellow area and green numbered circles). The price stayed above that level (buyers taking back control ).
In the current 4 hour bar, the price has moved back up to test the underside of the broken trend line at 106.734 currently.
The failed break to the downside and rebound is a disappointment to the sellers. A move back above the broken trend line with more momentum would just put the price back in the up and down range that preceded the run lower yesterday. It should also discourage the sellers and encourage the buyers (buyers take more control).
