Bounce off key support earlier. Key resistance ahead.
The USDJPY today is about correction in the Asia-Pacific session. The Shanghai composite helped that directional move (down 6.42%).
Technical, the pair stalled after breaking below the 100 hour moving average and broken trendline, the price could not get below the 200 hour moving average. Sellers turned into buyers at the support area, and we are now seeing the price trading at the days high.
What next?
Looking at the hourly chart, the yellow area between 118.695 and 118.869, has a number of swing lows, swing highs, the 38.2% retracement of the move down from the December 18 high. Yesterday (and on Friday), the price stalled at this area.
We found support at support earlier today. We are moving toward resistance at resistance now. I would expect that patient traders will lean against the high/38.2% with stops above. Traders who like the dollar and bought earlier may also be looking for the break and run. Support for buyers below are now at 118.37 and 118.10. Stay above and the buyers remain in control.
Taking a quick look at the daily chart, the 118.22 -508 has a number of swing lows going back to last year this time. More bullish being above that area now.
