Lower than expected GDP is not hurting the dollar or the USDJPY in particular which continues its run to the upside (and trades near the high for the day). Rates in the US are also higher after the report as traders look past the -1.4% decline mainly due to higher trade deficits and lower inventories.
The 10 year is back up to 2.88% (the low reached 2.796% earlier today) and is now up 4.4 basis points. Stocks are a little lower from pre-release levels but holds onto strong gains on the back of the Meta shares surge (up 14.18%). Apple and Amazon report after the close today.
Looking at the USDJPY, it moved above the 130.00 level for the first time since 2002 today (new 20 year high). It also moved above the 131.00 level for the first time since 2002.
Get used to the 2002 reference as until the price of the USDJPY moves above 135.16 level, the USDJPY will be "making new 20 year highs going back to 2002".
What's after 2002 high?
Should the price get above 135.16, we will will all be talking about the USDJPY trading at the highest level since 1998 (or 24 year highs). PS. The high price 1998 reached 147.67 so there is a lot of room above the 20 year high level.
Enough of the 20 year reference...
Drilling to the hourly chart below, yesterday the price move back above the 200 and 100 hour moving averages after dipping below for the first time since April 1 on Tuesday and starting the day below the levels on Wednesday. The inability to stay below the 200 hour moving average gave the buyers the go-ahead to push higher. The pair yesterday nevertheless stay below the next target swing area near 128.63 to 128 70. That level however was broken in the Asian session, leading to a surge above the 129.40 high price from 2022. The 130.00 level was the next target and it too was busted, followed by the 131.00 level as the BOJ reaffirmed it bond buying strategy despite higher inflation.
The high price peaked at 131.006 (dare I say the highest level since 2002). Since then, the pair has remained within the 130.00 to the 131.00 area (the low price reached 130.168 comfortably above the 130.00 natural support level).
Of note is that the 38.2% retracement of the move up from the low reached just yesterday is way down at 129.449. That is just above the old high from earlier this month at 129.40. One can argue that it would take a move below that level to give the sellers any hope. Until then, the buyers remain in full control.
Are there any closer levels to eye for short term risk on the downside?
Drilling to the 5 minute chart below, the consolidation over the last six or seven hours has seen the 100 bar moving average (blue line in the chart below) catch up to the price. That moving average currently comes in at 130.485. The price did dip below that moving average briefly after the GDP numbers, but has since pushed back to the upside.
In the short term intraday trading, a move below the 100 bar moving average would be a modest minor tilt to the downside, with the caveat that there is more work to do.
Specifically, the 38.2% retracement of the move up from the spike higher in the Asian session comes in at 130.091 just above the 130.00 level. Getting back below that both those levels and staying below those levels intraday, would tilt the bias little more to the downside. The rising 200 bar moving average at 129.663 and the 50% midpoint of the last trend move higher 129.809 are other targets to get to and through if the sellers are to start to take back more control.
Absent those types of moves, and the buyers are not winning. The sellers remain in firm control even from the intraday short-term perspective.
Trends are a fast, directional tend to go farther than traders expect. The USDJPY is proof positive of that statement.
