Higher yields push the dollar higher
USDJPY fell during the early Asian session and fell below the 100-day moving average of 109,724. However, the break was short and the sellers turned to the buyers.
Higher interest rates have helped support the dollar and, in the process, raise the USDJPY.
The pair moved back above their 100/200 hour moving average (blue and green lines), trading close to each other between 109,902 and 109,940.
Initial resistance was found to the trend line, which combined the latest records from 1 September, 2 September and 3 September (see red numbered circles). Sellers initially leaned against this trend line, but eventually this trend line broke in the last few hours and the price has risen. The 50% midpoint of moving from last week’s peak to last week’s lowest level is close to 110.00. Stay above the midpoint and a broken trend line would tilt the bias more upwards, at least for a short time.
The maximum today is 110.17. It had no sway area resistance between 110,222 and 110,263 (see green numbered circles).
What happens next?
If the price trades above 50% and the trend line breaks, the tilt is a little more on the bullish side. Keeping these levels above keeps buyers in more control. In addition, the following targets are 110.22-110.263. When moving over this area, traders would be swinging from 110 September at 110,414. This was the highest level since August 13.
More broadly, the pair has been in a rather narrow range until August 17 (that’s about 15 trading days), about 100 points. Pricing has risen and fallen, with most activities ranging from 109.56 to 110.263. Extensions above 110,414 and below 109,407 were short-lived.
So traders are still unsure of the bias (or rather, there is more to prove). Nevertheless, in a short period of time, buyers will be above the trend line and 100/200 hours away from the moving averages, playing a bigger game. Can they continue this momentum and reach beyond the upper extremes? This is what traders are now catching the eye of.