Who’s paying attention to the USD/JPY daily ceiling?
The euro continues to dominate headlines and while this pair is trading in a range – like many of daily charts of dollar-correlated major pairs – the USD/JPY is trading sideways indicating potential exhaustion at range highs and lows.
The USD/JPY daily chart has traded higher breaking the June 28 high of 81.27 and created what could be a soft double top. The challenge with this ceiling is whether or not the USD/JPY is in a narrow sideways with low volatility or a wider range with higher volatility: The more volatility the higher the chance that the pair will exhaust at the current level. While the Stochastics (21, 1, 3) is indicating an overbought market with a reading over 80, the MACD Histogram is above the zero level indicating momentum. Which is correct will depend upon how flat the 34EMA Wave is on the daily AND whether the intraday momentum seen on the 15 and 30-minute charts can carry the pair higher through 81.41 – the high hit at 8:21am EST.
The 30-minute chart is holding prices at the 34EMA Wave and this overlaps with the 81.20 minor psychological level. The 81.00 will also likely offer near-term buying support. If there is a fade (short sell) based upon the daily USD/JPY range, it will require that the 81.00 be broken. A stop-loss place just above today’s 81.41 high (perhaps consider the 81.55 level) is a relatively low risk entry for a longer-term time frame and aggressive entry. The 15-minute has already begun to transition to a sideways market phase and the 30-minute could follow suit.
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