Apr 18, 2022 10:25AM ET
By: AnalysisWatch
In Asian trading, the USDJPY reached a new cycle high (and the highest level since 2020) at 126.74. Friday's high reached 126.67 before declining slightly by the close of trading. Good Friday's close was 126.40, with the current price trading at 126.56, with the low falling as low as 126.23 in Asian trading.
As pointed out in a post on Friday, traders who have been selling due to the overbought USDJPY have had to contend with increasingly higher prices on most trading days. One of the main catalysts is the yield spread between U.S. and Japanese yields, which continues to rise as Fed policy is geared toward raising rates while the BOJ is content to keep rates where they are (while pushing down longer-term rates).
Admittedly, the upward momentum is waning a bit. The upper trend line on the hourly chart above was NOT tested today (see hourly chart above).
Price has traded above and below its 100- and 200-bar moving averages (blue and green lines on the chart below) on the 5-minute chart.However, on the intraday chart, it is noticeable that some sellers traded against the near-converging moving averages during the last upward move. This gives the short-term intraday preference a slight downward bias. Look for the small nuances on the 5-minute chart for possible clues.
Overall, the more consolidative trading has caused the moving average on the 100-hour line to continue to move closer to the current price (see blue line on the hourly chart above). This 100-hour moving average is still about 60 points away from the current level (moving averages at 125.928). Sellers still have a lot of work to do.