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James Hyerczyk

The Dollar/Yen posted a marginal gain on Thursday as investors squared positions ahead of the long-holiday weekend. Trading was thin with many investors out between the Christmas and New Year holidays. The Forex pair also held just above its nine-month low at 102.886, hit earlier in the month on December 17.

On Thursday, the USD/JPY settled at 103.305, up 0.090 or +0.09%.

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The Dollar/Yen was supported as U.S. Senate leader Mitch McConnell dealt a likely death blow on Wednesday to President Donald Trump’s bid to boost coronavirus aid to Americans, declining to schedule a swift Senate vote on a bill to raise relief checks to $2,000 from $600.

In other news, data on Thursday showed that the number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week but remained elevated more than nine months.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 102.886 will signal a resumption of the downtrend. The main trend will change to up on a move through 104.751.

The minor trend is also down. A trade through 103.899 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 102.886 to 103.899. Its 50% level at 103.393 is controlling the near-term direction of the Dollar/Yen. The close under this level makes it resistance.

The short-term range is 105.677 to 102.886. If the minor trend changes to up then its retracement zone at 104.282 to 104.611 will become the primary upside target.


Short-Term Outlook

Despite the sharp break on Wednesday, buyers came in to defend the 102.886 main bottom. This was likely a function of the thin holiday volume. Under normal trading conditions, sellers would’ve taken out 102.886 and triggered an acceleration into a pair of main bottoms at 101.185 and 101.179 over the near-term.

Overcoming 103.393 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor top at 103.899.

For a look at all of today’s economic events, check out our economic calendar.
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