The USDJPY broke above a topside trend line yesterday and in the process, moved to a five year high at 116.345. However the price momentum did stall and closed off those levels (and near the natural support at 116.00).
In the early Asian session today, the price tried to move higher but could only reach a intraday high of 116.238.
The subsequent fall from the high took the price back toward the midpoint of the trading range this week at 115.643. The low price reached 115.615. The broken trendline on the hourly chart was also retested near that level.
The surprising ADP report sent the the price back higher to 115.93 as yields initially moved higher (10 year year yield moved to 1.668%), but yields have moved back lower (the 10 year is at 1.651% currently), and that took the wind out of the modest rise in the USDJPY. The current price is at 115.79.
What next?
The price is lower on the day, but the 50% retracement did do a fair job of holding support. It would take a move below that level to increase the bearish bias, with the rising 100 hour moving average at 115.46 as the next major target area.
Hold the 50%, and the buyers are still in control.
Taking a broader look at the daily chart, the high price yesterday DID STALL near a topside trendline connecting the March high to the November high. So there was a reason to take a breather.
Going forward, getting above that trendline would open the door for further upside momentum going forward.
Also, the price of the USDJPY has been up 9 of the last 11 days. Although today is lower, the trend has certainly been to the upside in favor of the buyers.
