USD/JPY Forex Technical Analysis – Bulls Having Trouble With Major 50% Level at 109.664

The Dollar/Yen closed lower after U.S. government debt yields held steady on the final trading day of the week after import prices increased less than expected. The selling actually began on Thursday with the release of lower-than-expected U.S. consumer inflation data, which eased concerns about the pace of the Fed’s tightening strategy.

The USD/JPY settled on Friday at 109.352, down 0.032 or -0.03%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 110.028 will signal a resumption of the uptrend. A trade through 108.641 will change the main trend to down.

The main range is formed by the November 6 top at 114.728 and the March 26 bottom at 104.600. The USD/JPY is currently testing its retracement zone at 109.664 to 110.859. This zone stopped the rally at 110.028 on May 2. The longer-term direction of the USD/JPY is likely to be determined by trader reaction to this zone.

The short-term range is 110.028 to 108.641. Its 50% level or pivot is 109.335.

The next range is 106.878 to 110.028. Its retracement zone is 108.453 to 108.081.

Another range is 104.600 to 110.028. Its retracement zone is 107.314 to 106.673.

Daily Swing Chart Technical Forecast

Based on Friday’s close at 109.352, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the short-term pivot at 109.335.

A sustained move over 109.335 will indicate the presence of buyers. The next target is the main 50% level at 109.664, followed by the main top at 110.028. This is the trigger point for a potential acceleration to the upside with potential targets coming in at 110.477 and 110.859.

A sustained move under 109.335 will signal the presence of sellers. This move could generate the downside momentum needed to challenge the main bottom at 108.641 and the retracement zone at 108.453 to 108.081.