A Week of Two Halves
The USDJPY has settled the North American session marginally higher on the day, capping off a week defined by up-and-down volatility.
The Lows: Sellers controlled the early action, pushing the price to a weekly low of 154.89 during Monday's session.
The Highs: Buyers fought back mid-week, driving the pair to a peak of 156.95 late Tuesday into early Wednesday.
The Settle: As the dust settles, the price is currently trading near 155.81. Interestingly, this is almost perfectly aligned with the 155.92 midpoint of the entire week's trading range, signaling a market in equilibrium as traders head into the weekend.
The Technical Battleground: 100 vs. 200 Hour MAs
Heading into the new trading week, the technical picture is tightening. The price is currently "squeezed" between two critical technical indicators on the hourly chart. These moving averages will act as the primary barometers for sentiment:
Resistance (The Ceiling): The 100-hour moving average is currently sitting just above at 156.06.
Support (The Floor): The 200-hour moving average is providing immediate support below at 155.68.
The proximity of these two levels suggests a breakout is imminent. Whichever line breaks first will likely dictate the directional bias for the start of next week.
Next Week's Game Plan: Key Levels to Watch
Traders should watch the break of this moving average "sandwich" to define their risk and targets.
The Bullish Scenario:
Trigger: If the price moves and stays above the 100-hour moving average (156.06), the bullish bias increases.
Target 1: Momentum to the upside would have traders targeting the resistance zone between 156.57 – 156.73.
Target 2: A break there opens the door for a retest of the weekly high near 156.95.
The Bearish Scenario:
Trigger: If the price moves and stays below the 200-hour moving average (155.68), the bearish bias takes control.
Target 1: Downside momentum would initially target the psychological 155.00 level.
Target 2: A break below that handle exposes the swing area between 154.40 and 154.47.
Watch the Video Analysis: In the video above, I (Greg Michalowski, author of Attacking Currency Trends) break down the technical factors driving the move, outline where the risk is, and map out the next targets that matter most for USDJPY traders.
Be aware. Be prepared.
