The rebound in the 100-day MA on Wednesday was a turning point for the pair.
The USDJPY started the trading week moving above its 200-day moving average for the second day in a row (see areas shaded in red near the top of the chart above). It was the third attempt above the 200-day moving average (there were two last Friday). Like the other two, this one also failed.
Later in the day, the price fell below an uptrend line, half a floor (neckline), and a 100 hour moving average. This added to the technical selling pressure.
The downtrend did not stop until the pair hit its key next day moving average at the 100-day MA on Wednesday. The buyers leaned in and the rally began.
Wednesday and Thursday’s corrective move found resistance near a swing zone around the 104.82 level (see red numbered circles). Sellers have leaned against this level until today, when the price was able to break it and also fell from the 100 hour moving average (blue line). Ultimately, buyers continued their upward momentum.
The pair moved to test a channel trendline and retreated. The broken 38.2% retracement at 104.922 found buyers of support. It’s a near intraday risk now. The upper trendline cuts at 105.165 and this is the next hurdle for buyers (who have more control). Go beyond this level and traders can look back towards the 105,332 area.
If the buying momentum stagnates and the price breaks below the 38.2% retracement, we might see a revision of the 104.82 level with the 100 hour moving average at 104.768.
For now, however, buyers are in control