The USDJPY is trading to yet another new high going back to September 1998. The price today took out the high from last month at 136.997. The high price is trading at new highs for the day at 137.53 as I type.
Fundamentally, the BOJ continues to support keeping the pedal to the metal with no signs of raising rates. BOJs Kuroda reiterated that view today. The elections over the weekend confirmed the publics approval as they voted to keep the political status quo. Full steam ahead there as far as easing while in the US the stronger than expected jobs report on Friday, will be hit with an expected +1.1% gain for the month (that is month) in the CPI on Wednesday points toward another 75 basis point hike when the Fed decides their next decision on July 27.
Looking at the hourly chart below the pair moved to new highs (above 136.997) in the Asian session and reached a high at 137.272 before rotating back below the aforementioned old high.
The run lower took the price back into the swing area from the June highs between 136.70 and 136.997. The low price reached 136.702 - right at the low of that range. Holding that level was the "go-ahead" to run higher once again. It also solidifies that level as key support going forward.
With the price trading at highest levels since 1998, traders have to often rely on the support for risk and bias defining levels. Stay above is more bullish which means going higher is still the way.
In addition to the 136.70 to 136.997 area, the earlier Asian session high at 137.272 will be a shorter term support level. Stay above is more bullish. Move below 137.27, and 136.997 and 136.70 will be targeted and all would have to be taken out. Absent that and the sellers are simply not winning - the buyers are.
Last week, the lows for the week found support at a lower upward sloping trend line with the last low bounce on Wednesday (see green numbered circles) and bounce above the 100/200 hour MAs.
On Friday, the price traded back below the 100/200 hour MA after the assassination of former PM Abe, but rebounded back above those MA level (blue and green lines), and bounced off the MA levels after the post Non Farm Payroll low.
That bounce off the MAs was a key bounce and has also helped to give buyers more confidence to the upside and pave the way for more upside momentum today.
Buyers in control. Key break today, and that break will need to fail for the sellers to get back in the ball game.