The USDJPY has moved back higher in early US trading and in the process nearly erased the declines seen in the European session. The close yesterday came in at 127.28. The high price just reached 127.278, just below that level. The current price is trading at 127.07 as I type as the sellers reenter.
What next?
Looking at the price action today, in the Asian session buyers tried to push the price back above its 100 hour moving average, but momentum on 2 separate breaks could not be maintained, and the price quickly rotated back to the downside. Ultimately, if the price is to move higher, getting and staying above the 100 hour moving average is important.
As a result of the failed breaks, the late Asian/early European session, saw the price tumble lower, falling below a swing area between 126.93 and 127.00.
That break led to more momentum to the downside. However the price decline stalled ahead of the low price from Tuesday's trade. The low price reached 126.54 before consolidating and moving back higher over the last few hours of trading.
The 126.93 to 127.00 area will now be eyed for short term intraday support. Hold that level and the battle is on between the 100 hour MA above and the swing area below down to 126.93.
Taking a broader look at the price action this week, recall that the low price on Tuesday stalled just ahead of the 50% midpoint of the move up from the corrective low on March 31 (at 121.306 - see 4 hour chart below). That low - going back to the end of March - was the base for the move up to the May 9 high price at 131.342 (over 1000 pips from low to high).
The price action this month - retracing 50% of that broader move - is having difficulty going further this week. There is some reluctance against the level (a bottom?).
Having said that, the buyers still have to prove that they can take back MORE control. That means getting up back above the 100 hour moving average and staying above that level. Without that, they are not winning, the sellers are....
Overall, the price
