The USDJPY rebounds up toward the December ceiling


The dip to the 38.2% stalled the fall in the USDJPY

Yesterday was a down day and the technicals defined the bias.

The dip to the 38.2% stalled the fall in the USDJPY
The price fell below the December ceiling at the 109.675-723 area.  That was the first break below since the move above the area and January 13. The technical breaks sent the price below the January 10/January 13 lows at 109.42 and down to the 38.2% retracement at 109.275. Those levels were outlined in my post on the pair yesterday (click here). The price and bounced off that support target.

Today, the range is still narrow at 21 pips (the 22 day averages 46 pips).  The high has extended to 109.647.  That keeps the price below the December ceiling area (yellow area). We currently trade at 109.53.  

Admittedly, falling below the ceiling, but holding the 38.2% retracement muddies the bullish waters, but is not a disaster. Buyers came in at retracement support and push the price higher.  However, the ceiling was broken earlier this month, and became a floor. That floor was broken to the downside yesterday making the area a ceiling again.  

So what I am saying is that there is a technical battle going on between the 38.2% retracement buyers, and the ceiling sellers.  

Helping the upside is higher global stocks. European shares are higher today, and the US stocks are expected to open higher as well. Next week is a key week for earnings, so there may be some governor on the upside momentum. Also not really helping the upside are that the yields in the US are marginally lower (10 year -1.0 basis points and 30 year -1.5 basis points). 

Perhaps the trading on Friday is to lean against extremes with stops on a break, and if you don’t get there (i.e. to the extremes), do nothing.

ForexLive



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *