I’m adding a little “extra something” on the USDJPY daily today because I think it’s important for ya’ll to see this. As you can see, I’ve put up the 200-SMA there to show you that it has served as a dynamic resistance level twice before breaking a few weeks back. And what do we know from broken resistance levels? Yep, you got it… they turn into support. It looks like this is exactly what’s happening now. Price was able to find some significant support around the 50% Fibonacci retracement level and the 200-SMA. With stochastics about to hit oversold territory, could we see the USDJPY rally further? In any case, still watch that 50% Fib closely closely, as a break in that level could take the pair all the way down for a retest of the rising trend line that extends all the way back from November.
Taking a look at the AUDJPY, it looks as if abroadening formation had been forming on 4-hour chart. It looks like sellers tried to make a break of the falling support line, but failed to do so. A fake break? With stochastics showing upward momentum, we could see price continue to rise and test the top of the formation at 87.50. On the other hand, if sellers are determined to make a run for it, they could drag price back down to test the falling support at around 84.75.
Are we seeing the EURJPY range again? I think so! After hitting as high as 127.65, the pair took a dip in the deep end, falling to former support levels around 123.50. Notice the spinning top at the end of the down move and ensuing bullish green candles? If the pair is indeed ranging, we could see the pair zoom back up to test highs at 127.65. On the other hand, if selling pressure is strong, we could see a break towards lows at 121.50.