USDJPY backs off from break to new highs since March 2017

The price of the USDJPY moved above the  October 2021 and November 2017 highs yesterday, but are backing off today

Yesterday, the USDJPY extended above the October 2021 high for the year at 114.691 and then the November 2017 swing high of 114.728.

Those breaks saw the highs extend today in the Asian session to the highest level since March 2017 to 114.964 - just ahead of the natural resistance at 115.00. 

Since then, the price has rotated back to the downside and in the process has moved back below the aforementioned swing highs. The price currently trades at 114.56.

Drilling to the hourly chart below, the move to the upside also broke outside the "Red Box" that confined the range going back to October 12.  Last week sellers had their shot on the break of the lower end.  However that break failed, and sellers turned the buyers (see shaded red areas from November 8 to November 10). The price pushed all the way up to the upper extreme's of the "Red Box"/

Yesterday/today, the buyers took their shot on the break outside the upper extreme, and that shot has also failed.  

It will now take a move back above the previous high at 114.691 (and the Nov. 2017 high at 114.728), to give the buyers more confidence.  Absent that, the failure will start to weigh on the pair (to the downside).  

The price is currently trading within a swing area between 114.45 and 114.54.  Move below and the rising 100 hour moving average at 114.226 (and a swing area between 114.265 and 114.303) would be targeted.   Move below the 100 hour moving average and more disappointment on the failed break to the upside should emerge (pushing the price lower). 

Overall, there is no doubt that the failed break is a disappointment technically. The price remained confined for a long period of time and on the break, it fails.  That is not good for the buyers.

Having said that, the correction is still fairly modest. Hold near the current swing area, and we could see a resurgence to the upside with a break of the October and November 2017 swing highs needed too make the fear from the failed break disappear .
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November 18, 2021 at 03:22AM

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