Greg Michalowski of ForexLive.com charts a currency pair’s break out above the 105.00 level but also explains how the move—though it showed increased momentum—did fail.
The USD/JPY extended above the 105.00 level and also above a fitted channel trendline in the process (the lower trendline was in place. I added a topside channel line to see if seller were tempted).
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The move above the topside trendline showed increased momentum, but that move failed. The price has corrected back toward the 105.00 level (low at 105.04).
The market might have been getting a bit tired for the day on Tuesday. I will be looking to see what happens on a test of the 105.13. If seller, enter a move back below the 104.98-105.035 will be a level to eye for further clues that a temp high is in place (i.e., more neutral market).
PS. The EUR/JPY is banging against recent highs which may also attract reasons to sell (or to trigger stops on a break above). So, key time for JPY.
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By Greg Michalowski of ForexLive.com
