USD/JPY Forex Technical Analysis – Downside Momentum Points Toward 103.177 Main Bottom

The Dollar/Yen is trading lower early Wednesday as progress toward a massive U.S. government stimulus bill and COVID-19 relief measures whetted risk appetite and dampened the U.S. Dollar’s appeal as a safe-haven asset.

Also pressuring the greenback by supporting sentiment, the U.S. expanded its roll-out of a vaccine from Pfizer Inc and German partner BioNTech SE, while another developed by Moderna Inc appeared set for approval this week.

At 02:48 GMT, the USD/JPY is trading 103.610, down 0.031 or -0.03%.

The USD/JPY fell 0.372% on Tuesday as investors cheered developments in Washington regarding a stimulus package to help ailing Americans from the economic ramifications of the COVID-19 pandemic.

Market participants are also looking to the Federal Reserve’s comments on Wednesday about the future of the U.S. economy.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 103.177 will reaffirm the downtrend. Taking out 104.751 will change the main trend to up.

The short-term range is 103.177 to 105.677. Its retracement zone at 104.132 to 104.427 is resistance. Trading on the weak side of this one is helping to generate the strong downside bias.

Daily Swing Chart Technical Forecast

We’re currently trading in a headline driven market. As long as the headlines continue to point toward U.S. stimulus, the USD/JPY could feel downside pressure.

Trading on the weak side of the Fibonacci level at 104.132 will signal the presence of sellers. If this move is able to generate enough downside momentum then look for the selling to possibly extend into the November 6 main bottom at 103.177.

Holding between 104.132 and 104.427 will indicate a neutral trade.

Overtaking 104.427 will signal the return of buyers.

Be prepared for a volatile session especially if Congress announces a coronavirus-aid package and the Fed comes out as dovish.