USD/JPY Forex Technical Analysis – Big Decision for Trend-Trading Buyers at 104.427 to 104.132

The Dollar/Yen is trading nearly flat after posting its best weekly performance since early June last week. Although global equity markets are trading higher, undermining the greenback more broadly, the total virus cases in the U.S. surpassed 11 million on Sunday as the pace of the pandemic quickened.

At 11:40 GMT, the USD/JPY is trading 104.620, up 0.004 or +0.00%.

The U.S. Dollar could strengthen against the Japanese Yen if U.S. Government bonds and stocks maintain their upward moment.

In other news, data on Monday showed signs of economic recovery in China and Japan, the world’s second and third largest economies. China’s industrial output rose by a faster-than-expected 6.9% in October, while Japan’s economy grew at its fastest pace on record in the third quarter.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 105.677 will signal a resumption of the uptrend. A move through 103.177 will change the main trend to down.

The main range is 107.049 to 103.177. Its retracement zone at 105.113 to 105.570 is resistance. This area stopped the rally on November 11 at 105.677. Trading below this zone makes it resistance.

The short-term range is 103.177 to 105.677. Its retracement zone at 104.427 to 104.132 is potential support. It stopped the selling earlier today at 104.364, the low of the session. Since the main trend is up, buyers likely came in to support the uptrend.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Monday is likely to be determined by the short-term 50% level at 104.427.

Bullish Scenario

A sustained move over 104.427 will indicate the presence of buyers. If this move creates enough upside momentum then look for a rally into 105.021 to 105.113.

Bearish Scenario

A sustained move under 104.427 will signal the presence of sellers. This could trigger a further decline into the Fibonacci level at 104.132. This is a potential trigger point for an acceleration to the downside. The daily chart indicates there is plenty of room to the downside with 103.177 the next likely downside target price.

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