The 61.8% keeps on finding sellers...
On Tuesday, Morgan Stanley said that the retracement area in the USDJPY (at 50% to 61.8% of the move down from the pre-BOJ high) was an area where the USDJPY was running out of steam (see post here). So what happened this week?
The pair moved toward the 61.8% at 109.46 on Tuesday/Wednesday (the high reached 109.36) and came down to a low of 108.22.
The price climbed again on Thursday. The high reached 109.39. The fall came down to 108.62 and then 108.51 today.
From the low today, the price moved higher again and this time was pushed higher by better retail sales first, and then Michigan consumer confidence. The price on the former stalled at 109.44 - just short of the 109.46 retracement level. On the 2nd run up (on Michigan), the 61.8% was broken finally. The high extended to 109.53, but reversed and fell back lower once again.
Is MS keeping a lid on it?
We/I will never know (the market is too large), but we have to give them credit for the heads up on Tuesday and can also say, the USDJPY has indeed run out of steam at the high area. Can it continue?
Going forward...resistance remains against the 61.8% retracement level. Closer resistance comes in against the 200 bar MA on the 4-hour chart at the 109.27 level
Where does the selling take more control now?
I would earmark the 108.62-806 where the 100 bar MA on the 4-hour is found, the 50% and the 100 hour MA are all clustered together (see lower yellow area in the chart above). A move below that area SHOULD turn the bias more negative.
