USD/JPY Forex Technical Analysis – Big Sellers Waiting for 103.388 to Fail as Support

The Dollar/Yen is trading lower on Tuesday as investor risk sentiment rose, encouraged by a Brexit trade deal and hopes a long-awaited U.S. pandemic relief package will be expanded.

The Japanese Yen strengthened against the U.S. Dollar after U.S. President Donald Trump’s approval of a $2.3 trillion stimulus package to counter the effects of the coronavirus pandemic.

At 08:48 GMT, the USD/JPY is trading 103.636, down 0.155 or -0.15%.

Britain clinched a narrow Brexit trade deal with the European Union last Thursday, just seven days before it exits one of the world’s biggest trading blocs.

Firmer demand for riskier assets kept the U.S. Dollar, which is often seen as a “safe-haven” asset, on the back foot. It was down 0.02% against a basket of major currencies.

In other news, Democrats in the U.S. House of Representatives voted yes to a proposal for higher pandemic relief payments for Americans, although it appears unlikely to gain traction in the Republican-controlled Senate. If the Senate goes along with the new proposal then look for the Dollar/Yen to break sharply on the news.

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 down trend after eight days of sideways to higher trading. The main trend will change to up on a move through 104.751.

The minor range is 102.886 to 103.890. Its 50% level at 103.388 is providing support.

The main range is 105.677 to 102.886. Its retracement zone at 104.282 to 104.611 is resistance.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to the pivot at 103.388.

Bullish Scenario

A sustained move over 103.388 will indicate the presence of buyers. A move over 103.899 will indicate the buying is getting stronger. But there is going to have to be a surge in volume to trigger a rally into 104.282 to 104.611, the next major upside target zone.

Bearish Scenario

A sustained move under 103.388 will signal the presence of sellers. If this is able to generate enough downside momentum then look for a break toward the main bottom at 102.866.

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