The USDJPY spiked higher to 150.154 after the JOLTs job data, then tumbled nearly 285 pips in seconds, testing the swing low going back to September 21 in the process.
Ghosts of a Bank of Japan intervention was the excuse.
The snapback higher then took the price back up 190 pips.
Looking at the 5-minute chart above, the price moved up to 149.232 in the process. Then back down to 148.511 twice, and ultimately back up to a swing high of 149.326. Since then, the price has been waffling up and down.
Taking a broader look at the hourly chart below, the price action after the initial tumble has seen the price trade above and below the 200-hour moving average (currently at 149.016). Having said that, the last dip could only reach 148.949. The current price trades just above the moving average level at 149.042.
Although the price has traded above and below the 200-hour moving average -whipping traders around in the process – it still remains a barometer for buyers and sellers. Staying above is more bullish. Moving below is more bearish.
So, watch at moving average for clues. On the top side, keep it only on 149.23 – 149.33 as potential short-term resistance. If the price gets above that level we could see a move toward the 100-hour moving average at 149.51.
Conversely, break below the 200-hour moving average with momentum, traders will likely look toward 148.51 (see the double bottom on the 5-minute chart) as the next downside target.
This article was written by Greg Michalowski at www.forexlive.com. Source