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James Hyerczyk
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USD/JPY

The Dollar/Yen is trading at its lowest level since March 25 on Thursday as U.S. bond yields pulled back from last month’s surge with investors buying the Federal Reserve’s arguments that interest rates can stay low.

At 09:36 GMT, the USD/JPY is trading 108.737, down 0.197 or -0.18%.

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U.S. Treasury yields are drifting lower on Thursday morning, ahead of the release of weekly jobless claims and monthly retail sales data, dragging down the U.S. Dollar.

Meanwhile, investors are positioning themselves ahead of the U.S. weekly jobless claims and March retail sales reports that could offer further clarity as to the strength of the U.S. economic recovery.

The initial jobless claims report is expected to show another 710,000 claims were filed for the first time during the week-ended April 10. March retail sales are also set to come out at 12:30 GMT and are expected to have jumped 6.1%, versus a 3% decline in February.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower. A trade through 108.407 will change the main trend to down. A move through 110.966 will signal a resumption of the uptrend.

The minor trend is down. This is controlling the momentum. A trade through 109.961 will change the minor trend to up.

The main range is 111.715 to 102.593. Its retracement zone at 108.230 to 107.154 is the primary downside target and potential support. This zone is also controlling the near-term direction of the Forex pair.

The short-term range is 108.407 to 110.966. The USD/JPY is trading on the weak side of its retracement zone at 109.385 to 109.687, making it a resistance area.

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Daily Swing Chart Technical Forecast

Look for a bearish tone on Thursday as long as the USD/JPY remains under 109.385.

Bearish Scenario

A sustained move under 109.385 will indicate the presence of sellers. The first downside target is the main bottom at 108.407. Taking out this level will change the main trend to down with 108.230 to 107.154 the next likely target zone. Look for buyers on the first test of this area.

Bullish Scenario

If the intraday momentum shifts to the upside then look for a possible rally into 109.385. Sellers are likely to come in on the first test of this level. Overcoming it will likely trigger a move into 109.687.

Side Notes

With today’s reports, it’s important that you trade the reaction in the Treasury yields and not the headline numbers.

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

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