USD/JPY Forex Technical Analysis – April 26, 2019 Forecast

The Dollar/Yen is recovering slightly early Friday, following the previous session’s steep sell-off. Position-squaring ahead of today’s U.S. Gross Domestic Product report is likely behind the short-covering rally. Thursday’s sell-off was fueled by safe-haven demand for the Japanese Yen after a sell-off in the global equity markets.

U.S. GDP is expected to come in at 2.2%, matching the previous report. Revised University of Michigan Consumer Sentiment is expected to come in slightly higher at 97.1.

At 05:36 GMT, the USD/JPY is trading 111.705, up 0.085 or +0.08%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down on Thursday when sellers took out the previous main bottom at 111.650. The new main top is 112.405. A trade through this level will change the main trend to up.

The short-term range is 110.843 to 112.405. The market is currently testing its retracement zone at 111.624 to 111.440. Look for further weakness if this zone fails as support.

The main range is 109.710 to 112.405. Now that the main trend is down. Its retracement zone at 111.058 to 110.739 becomes the primary downside target. This is also a value area so buyers could show up on a test of this area. On April 10, this zone stopped the selling at 110.843.

Daily Technical Forecast

Based on the early price action, the direction of the USD/JPY on Friday is likely to be determined by trader reaction to the 50% level at 111.624.

Bullish Scenario

A sustained move over 111.624 will indicate the presence of buyers. If this could trigger a rally into a downtrending Gann angle at 111.905. Sellers could come in on the first test of this angle.

The angle at 111.905 is also the trigger point for an acceleration to the upside with the next resistance angles coming in at 112.155 and 112.280. The latter is the last potential resistance angle before the 112.405 main top.

Bearish Scenario

A sustained move under 111.624 will signal the presence of sellers. Taking out the uptrending Gann angle at 111.593 will indicate the selling is getting stronger. This could trigger a retest of the Fibonacci level at 111.440.

The Fib level at 111.440 could trigger an acceleration to the downside with the next target angles 111.273 and 111.218. This is the last potential support angle before the main 50% level at 111.058.