Trend line is getting stronger
The USDJPY moved up to test the topside trend line again and has backed off. That trend line connects highs going back to Jan 19. Yesterday, the line was tested and held. After a corrective move lower, the pair moved back up today and retested. Sellers came back in.
The 114.26 is the 38.2% of the move down from the Jan 3rd high (high for the year) . We are trying to move back below that line now. Getting and staying below will be eyed as a first step. That first step has already failed once so be careful. Nevertheless, the sellers against the trend line are comfortably short. Can the correction continue is the big question now.
The USDJPY has had a strong run higher this week. The move started near the 100 day MA and that run has taken the price up about 290 pips to the high seen yesterday. Technically, that is bullish. BUT let's remember, the trends can end just like the trend lower into the 100 day MA ended on Tuesday.
This retest and hold at the trend line may not be the end of the trend move higher. Yellen/Fischer and ultimately "the market" will have the say on whether the trend line test signals the trend is over. What we know is if the price goes above that line, the price should go higher with the Feb 15 high at 114.95 and the 50% at 115.09 as targets on a break. That is a key line.
For now and for traders at the trend line it was worth a sell. The 114.13 will be eyed below followed by 113.76 and if the momentum really gets going because more sellers come in, we could head back down to the MAs all clustered in the 113.16-38 area. It will probably need some help from Yellen/Fischer, but who knows....maybe the stock market gets smashed and the JPY becomes the safe haven currency (sending the USDJPY lower). That is why I look at these silly pictures... They tell a story....