Rise in stocks seems to help push JPY pairs higher (sell JPY)
A Pavlovian reaction to large moves in stocks, may be a move out of the JPY with buying USDJPY and JPY crosses.
Looking at the low to high trading ranges for the major currency pairs below, the JPY pairs are all trading near the highs of the day. Many of these gains have been seen in the last few hours of trading.
Looking at the USDJPY, the pair extended above the 38.2% 104.42 retracement and an uptrend line on the hourly chart at 104.45. It’s close support now for the pair. The next target comes at the 50% retracement of the move down from the Nov 11 high at 104.659. Last week’s high price hit 104.756.
Looking at the EURJPY the pair ran above the swing hi of November 9 and the swing hi of yesterday’s trade near 125.128 (there have been a number of swing highs in the last 2 months between 124.99 and 125.128 – see yesterday’s post). More recently, the price has moved above an upper trendline on the hourly chart at 125.34. It’s a near risk now for the pair.