The USDJPY is sharply higher but finds a limit.
The USDJPY rallied about 315 pips from the low to high in trading today. The low for the day reach 101.997 in the 2nd hour of trading. The high in the Monday morning session extended to 105.209.
Technically, the price surge was able to extend back above a broken trend line at 102.714. After breaking the line and retesting that line (and holding), the price started to March higher (sellers turned to buyers).
There was initial resistance near swing low levels from March 6 (see red numbered circles). After a corrective move lower the price extended to a even higher high at the 105.209 level.
That final run to the upside today tested its 100 hour moving average (blue line in the chart above currently at 105.165). With the price unable to extend above that level profit takers have come in and push the market lower in the early North American session. On forward it will take a move above that 100 hour moving average to give the buyers more upside confidence.
We currently trade at 104.17. That is near the North American session low at 104.137.
Drilling to the 5 minute chart below, the pair is approaching its 200 bar moving average at 103.68. The area is also home to the swing low (and near a swing high) from earlier today and the 38.2% retracement of the move up from the low price yesterday. The combination makes the area (see yellow area in the chart below) as a key support intraday. Move below and we could see more rotation to the downside. Stay above and the move is just another correction in what is an up day today.
Helping the moves today is of course the rebound in stocks and bond yields. The Dow industrial average is currently up 680 points. The NASDAQ futures are up 238 points and the S&P index is up 77 points. In the US debt market the 10 year yield has recovered 9.12 basis points to 0.632%. The low yield yesterday was all the way down at 0.31%.
