The markets are taking the USDJPY higher after the better US data and in the process the pair is moving closer to the 145.00 area where the price peaked back on September 7 and again on September 14. Recall on September 14, the price fell sharply after the Bank of Japan queried the market for prices. The verbal intervention sent the pair down toward the 142.50..
The buyers took the price back higher into and post the Bank of Japan interest rate decision last week (no change)where the initial dip was bought back up and the price moved above the 145.00 level. The USDJPY price moved to a new high 145.893, but was met with actual Bank of Japan intervention this time which sent the pair down 500 pips in the short order.
Since then the tighter Federal Reserve and Dollar is King buying, has reestablish a move higher.
Last Friday, the pair retested its 100/200 hour moving averages (blue and green lines in the chart above). During yesterday's trade, the price moved above those moving averages and stayed above.
The pair today has traded back into a swing area between 144.557 and 144.984 (the actual highs from September 7/14). The high price just reached 144.845 - just 15-16 pips from the 145.00 level.
Early risk focused sellers against the 145.00 level are leaning. Risk can be defined against the level with stops on a break above. Traders in the NY session might feel good about testing the level in the NA session especially as it is in the middle of the night in Asian and the intervention vs the USD, was not a concerted effort from ALL major central banks. So traders can have some comfort in the hopes that when the "cats away, the mice will play".
However, the Bank of Japan has indicated an uneasiness above the 145.00 level, so there will be some traders who will lean as a trade and hope for a rotation lower against the "ceiling" (and stops on a break above).
Downside targets arer 144.05, 143.805 and then the 100 and 200 hour MAs at 143.634 and 143.513.
