USDJPY sets the close guardrails for next week’s trading
The USDJPY has set the technical guardrails for the rest of today and heading into next week.
Looking at the hourly chart, the low for the day stalled just ahead of the 200-day moving average, currently at 158.313. The low reached 158.35 before buyers stepped in and pushed the pair back higher.
That rebound has taken USDJPY back toward today’s high and yesterday’s high, where sellers have leaned against the 100-hour moving average at 159.04 and the 200-hour moving average at 159.154.
Those moving averages now define the upper guardrail, while the 200-day moving average defines the lower guardrail.
If the price remains below the 100- and 200-hour moving averages into the close, that area will remain the key topside barometer. Conversely, a break above those levels would tilt the technical bias more firmly in favor of the buyers.
So, with the guardrails defined, what are the next targets?
On the downside, a break below the 200-day moving average at 158.313 would have traders looking toward the swing area near 157.979 (see the red numbered circles on the chart). A move below that level would open the door for a further decline toward the 157.25 area.
Conversely, a move above the 200-hour moving average at 159.154 would have traders targeting the 50% midpoint of the decline from the July high to the early-August low at 159.60.
Above that, the next major target comes near 160.00. A swing area and the 100-day moving average at 159.983 converge around that level, increasing its technical importance. The 160.00 level also carries added significance as a natural round-number target.
So the technical roadmap heading into next week is well defined:
- Lower guardrail: 200-day MA at 158.313
- Upper guardrail: 100-hour and 200-hour MAs at 159.04–159.154
- Below 158.313: Targets 157.979, then 157.25
- Above 159.154: Targets 159.60, then 159.98–160.00
For now, USDJPY remains confined between clearly defined technical levels. That leaves traders waiting for the next shove — and, importantly, the levels that would signal the next directional break are firmly in place
This article was written by Greg Michalowski at investinglive.com.