The USD/JPY bulls made a massive power play in today’s session, but the momentum has hit a significant wall. While the morning was defined by aggressive buying, the failure to sustain the breakout has handed the “short-term steering wheel” back to the sellers.
The Rise: Clearing the 100-Hour MA and Last Week’s High
The day began with a decisive move away from the 100-hour moving average, as buyers successfully cleared the previous week’s high of 156.826. This surge appeared to have legs as it charged toward two major technical hurdles:
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The February 9 High: 157.65
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A Major Topside Trendline: Intersecting near the same 157.65 level.
For a moment, it looked like a clean break. The pair pushed to a session high of 157.75, briefly signaling a new regime of Yen weakness. However, that strength failed.
The Reversal: “The Buyers Had Their Shot”
The bulls had the opportunity to turn 157.65 into a floor, but they missed. The price has since collapsed back below both the February high and the broken trendline.
In technical terms, this is a failed breakout, which often leads to a fast move in the opposite direction. By failing to hold the extension, the buyers have lost their immediate grip on the market.
What’s Next: The Seller’s Road Map
The burden of proof has now shifted back to the buyers. Until they can reclaim and close above 157.65, the sellers are in the driver’s seat for a corrective rotation.
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Immediate Target: A move back toward the previous high-turned-support at 156.826.
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Secondary Target: If 156.826 fails to hold, expect a deeper rotation down toward the rising 100-hour moving average.
The Bottom Line
The “rejection” at 157.75 is a warning sign. Sellers have proven they can take down the buyers’ momentum at a critical resistance junction. Unless the bulls can muster a quick recovery above the February high, the path of least resistance points back toward the moving average.
This article was written by Greg Michalowski at investinglive.com.