A week ago today, the USDJPY made the most recent low after the weaker than expected US employment report. The market shrugged off that report on the day and that started a fast, than slower move to the upside for the rest of the trading week (see hourly chart below).
Today, the pair tested the topside trend line resistance level on both the weekly chart and the hourly charts (see charts below) at the at 107.36 level (high reached 107.378).
USDJPY has marched higher this week, but ran into resistance at the 107.36 area.
The level was too good for traders to not stick a toe in the water (yet again) from the short side, and the price has backed off to the 107.08 low in the London morning session. That low was smack on the upward sloping trend line connecting recent lows. The bulls continued to buy dips.
We just made new London session highs at 107.27. Yippee.
The 107.36 level remains resistance above off the weekly chart (that will not change this week) but on the hourly chart, the upward slope of the trend line (see chart below) now targets the 107.47 area. If the Retail Sales impress and send the pair higher, this might continue to be a resistance level for sellers to lean against into the weekend.
If the Retail Sales (and other data this morning) disappoints, a rotation to – and through – the lower trend line (at 107.13 now) and the low for the day (at 106.96 – 1st hour of trading) will be eyed as the next obvious levels to get below and stay below. Below those levels and the pair will next target the lows from yesterday at the 106.62/63 level and the rising 100 hour MA (blue line in the chart below) at 106.53. The price has not traded below the 100 hour MA since the move lower on the employment report a week. ago (for 4 hourly bars).
Bulls are in control until proven otherwise via a sustained break lower. We held the topside trend line – yes – but the sellers need to prove they can now do more before we declare any top is in place. .
The USDJPY bottomed last Friday at 104.67 on the weak US employment report. This week the price has moved steadily to the upside – peaking at 107.378 (so far).
The USDJPY