61.8% retracement is also eyed
The stronger dollar - and better data - has the USDJPY trading up to a new session high at 113.17. The pair was also pushing toward some key targets:
- The 200 week MA is at 113.23
- The 61.8% of the move down from the November 2016 high comes in at 113.295
- The early January 2019 high price comes in at 113.387
There is little reason to not go to and through those levels fundamentally (trade war hurting Japan, US economic strength), except that the cluster is a risk defining area that could/should attract traders looking for top and/or correction. Risk can be defined and limited. The price has moved back down to 113.04 currently in respect of the level.
Being prepared, if the levels are broken, the 114.36-49 has a cluster of swing highs from 2017. The 114.72 is a high from November 2017.
What would turn the beat around more for the USDJPY today/going forward?
For me, keep an eye on the 112.80 area. The swing high from July 13th is at that area, the close from yesterday came in at 112.81. The trend line comes in at 112.78 (see hourly chart below).
It might take a break of that area - at a minimum) to turn the bullish tide for the pair. Another important level is the 100 hour MA (blue line) at 112.628. If the price cannot go below that level, the sellers are winning the battle from selling against the key resistance cluster above, but they are now really winning the trend war. .
PS. Closer intraday trading risk, will eye the 112.909-112.97 area. That is the 38.2%-50% of the move up today and the 100 bar MA on the 5-minute chart is in that area at 112.936. Intraday buyers looking for a run higher, might give up on a break and look down for the 112.80 level instead.
