In the introductory video, I explained how if the USD/JPY pair continues to move higher, the 100-hour moving average needs to hold resistance.
Looking at the price action on Friday and again today, the highs and lows ignored the moving average line. With today’s decline, more selling momentum was found. The sellers made a stronger play.
Now that the price is back to the moving average, it is time for the sellers to show their desire to maintain control. The only way to do this is to sell against the moving average line and push the price lower. If the sellers succeed in overcoming the buyers, look for a turn towards the lows of the day (over time).
Conversely, if the sellers fail and the price moves back above the 100-hour moving average, I would expect the sellers to turn to the buyers (on disappointment – stops) and the price would instead move higher and back to the 38.2% level at 157.880.
So, this is a crucial moment for sellers to show their strength. Will they succeed in stopping the rebound to the upside?