Trades in a narrow trading range and looks for the next shove
The USDJPY peaked yesterday at 105.168. The price closed the day at 104.97 and moved lower in the Asian session to a low price of 104.916. The subsequent moved to the upside peaked at 105.10. That has the range for the day at only 18 pips. The 22 day average trading ranges about 50 pips for the pair. There is room to roam.
Looking at the hourly chart day wedge is forming between recent lows and recent highs. The current hourly bar moved down to retest the lower trendline at 104.96. That it is also near the close from yesterday at 104.97.
The topside trend line currently cuts across at 105.08. A 12 pip converging range between the top and bottom trend lines keeps the pair in check for now. However, traders will be looking for the break (of either extreme) with momentum go forward.
On the downside, the 104.82 to 104.84 and the rising 100 hour moving average at 104.786 (also the 38.2% retracement of the last trend move higher) are targets on further momentum. Getting below those levels is the minimum if the sellers are to take more control.
On the topside, move above the trendline and get above the high from yesterday at 105.168, opens the door toward 105.358. That is the 38.2% retracement of the longer-term move down from the June 2020 high to the January 2021 low (see daily chart below). The 200 day moving averages at 105.582 (green line in the chart below). From the daily perspective, getting to those levels and above is needed for the corrective action to continue on the topside.
