Some big tickets were dropped at the jobs report announcement this morning, spiking USDJPY to test the SMA100 at the top of the white channel — where it promptly reversed and tagged the bottom of the channel.
It seems to me that the odds are about equal of a spike to 103.8 or a plunge to 99.84 in the coming week — with the outcome largely dependent on how bad things get in Ukraine [LIVE FEED FROM ODESSA] this weekend. The upside case would take the pair back to the LT red trend line, the .886 of the recent drop, and the top of the falling yellow channel. Whereas the downside case is to the bottom of the channel and a number of important Fib levels.
The large red rising channel has always had two different possibly placements. The steeper of the two would characterize everything since Apr 10 as a backtest, with the upside case at 103.8 potentially completing the backtest. I’d keep an eye on the moving averages, about which the pair is currently bouncing.
Plunges in TNX have brought minimal corrections to stocks, while spikes back to former highs have produced new highs in stocks. And, lately, the spikes have formed a series of lower highs to go with the lower lows — even as stocks make new highs. This divergence is becoming hard to ignore.