The USDJPY moved to another 20 year high yesterday, but consolidated and corrected in the New York session. In my post yesterday morning I just focused on the 5 minutes chart. The reason is that in a trending market, gains by the countertrend traders must be made in the short-term, before gains can be made in the medium or long term.
Yes there can be targets ahead that may cause a slowing of the trend, but unless some negative technical bias can be triggered on say the 5 minutes chart, the buyers are simply not winning.
Yesterday, the price did move below both its 100 and 200 bar moving averages on the 5 minutes chart, and was successful in staying below those moving averages into the close.
However looking at the same chart today, in the Asian session the price was able to move back above the 100 and 200 bar moving averages (blue and green lines in the chart above), and stayed above those moving averages. There was a corrective move about 9 hours into the trading day, but buyers bounced the price off the 100 bar moving average. That bounce was a catalyst for an acceleration to the upside. The buyers are winning. The sellers were not.
In the early New York session, the price is continuing its run to the upside (there is another acceleration higher) and now trades at 134.33. The price is moving further away from its 100 bar moving average at 133.597. The 38.2% retracement of the last leg higher (from the bounce off the 100 bar moving average) comes in at 133.856.
It would now take a move below those levels to give the sellers some confidence. Absent that and the trend is still more in favor the buyers and the sellers are losing.
The new high at 134.466 is the highest level now since February 2002. The February 2002 high price reached 135.02. The January 2002 high price reached 135.16. If the price can get above those levels and the USDJPY will be trading at the highest level since October 1998. Those levels are the next targets that sellers may look to lean against (with stops above).
Looking at the EURJPY 5 minute chart below, it's acceleration to the upside today makes the USDJPY move higher look like it is in slow motion.
The pair also corrected yesterday, but was able to move back above its 100/200 bar moving averages in the New York afternoon session, and has been able to stay above its 200 hour moving average since then.
Today there was a brief dip below the 100 bar moving average, but that was quickly reversed and later the price made a final bounce off the 100 bar moving average before really taking off to the upside.
Looking at the weekly chart of the EURJPY below, yesterday the price moved above its June 2015 high and raced higher. The next major resistance target comes in against the 2014 high at 149.756.
