The USDJPY moved to the highest level in the recent run higher yesterday, breaking above the June high near 137.00. The high price yesterday reached 137.747 before backing off into the close. Nevertheless the prices was up sharply yesterday rising from the closing level on Friday at 136.04. The close price yesterday was at 137.41.
In trading today, the price in the early Asian session moved back down toward the 137.00 level reaching a low of 137.02. After a bounce back up toward the close from yesterday (and above it) to 137.52, the rotation back to the downside resumed.
Momentum increased on the break of the 137.00 level (a win for the sellers).
The price has now been down for 9 consecutive hourly bars and has seen the price move down from 137.52 to the low in the current hourly bar at 136.46. It also is approaching its rising 100 hour moving average 136.369. A move below the 100 hour moving average would give the sellers more confidence. However, there should be risk focused buyers near the MA on the first test, with stops on a break below. Fall below, and the 200 hour moving average 135.979 would be targeted.
With the failure to sustain momentum above 137.00. That level now becomes resistance once again. Ahead of that watch the 136.70 level which was near the swing highs going back to June 21 and June 22.
Lower yields are helping to weaken the dollar and the USDJPY today. However, the tighten by the FOMC and the continued stimulation by the Bank of Japan are a fundamental headwind for sellers. Nevertheless, the technical levels will help to tell the story, and corrections can gather momentum especially after failed break's, along with overbought markets.
