USDJPY finds profit takers against the 50% retracement level
The USDJPY has continued the rally higher today and reached the next target for the pair against the 77.77 level. This is the 50% retracement of the move down from the post intervention high from October 31st 2011 to the low reached earlier this month. This week the price in the USDJPY has ratcheted higher through the 100 day MA, the 38.2% retracement, and now up to the 50% retracement. Having the 50% level there does give traders a reason to sell today into the weekend risk. Bulls on the gains this week, would not like to the see the price break back below the 38.2 retracement level at the 77.35 level. The 77.37 area is also support on the hourly chart below (trendline). Closer support comes in at the at the 77.51 area which is the low for the day (see chart below).
Although there is fundamental reasons to see a rebound in the USDJPY, the pair has not been able to sustain rallies. Traders are fully aware of this and it therefore often leads to quick disappointment if targets to the upside are not breached. Hence it is prudent to be aware of the key technical levels and don’t be afraid to take some profit along the way.
On a break of the 50% the next key target would be the 200 day MA (green line in the daily chart above) at the 78.06 level. The price has not closed above the 200 day MA since April 2011.
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