USDJPY backs off from overbought levels. What now?

The USDJPY moved to a new 2023 high (and high going back to November 2022) reaching just above a key swing area on the daily chart (see video above for outline of that level) at 144.98 and the natural resistance at 145.00. However, the high price could only reach 145.066 before rotating to the downside. The market has been overboard on the daily chart.

Looking at the hourly chart, connecting the highs from Tuesday and Thursday targeted the 145.06 level (see red numbered circles on the chart below and the video). Sellers leaned against that level, and the price started to move lower. The overbought condition started to come off the boil (see video from yesterday “I know. I know. I know. The USDJPY is overbought, but how do you trade it?”).

What next?

Watch the video above to hear my thoughts and explanation for the “whys”.

This article was written by Greg Michalowski at Source