The USDJPYs initial reaction off of the Fitch downgrade was to the downside in the US dollar. The price fell toward a swing area between 142.23 and 142.65 on the daily chart (see video). In between sits the 61.8% retracement of the longer-term move down from the 2022 high to the 2023 low in the USDJPY. That level comes at 142.492.
Looking at the hourly chart below, each of those levels was part of the price action today. Initially, support held at 142.654 and bounced. Then support held the 61.8% retracement level at 142.498, and finally after that level was broken, the price held support near the low of the swing area near 142.23 .
That last support “hold” has led to a sharper move to the upside. The price is currently trading at 143.24.
So what the next?
Staying above that swing area on the daily up to 142.654 keeps the buyers more in control. On the top side, the high from the early European session comes in at 143.34. Above that the swing area going back to July 6 and July 7 between 143.439 and 143.539 would be targeted. Yesterday the high prices for the day stalled within that area (as projected in my posts yesterday). Get above that area and the door opens more.
This article was written by Greg Michalowski at www.forexlive.com. Source