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USD/JPY Forex Technical Analysis – Early Price Action Suggests Position-Squaring Ahead of U.S. Bank Holiday

By:
James Hyerczyk
Published: Nov 26, 2019, 08:00 UTC

Based on the early price action, potential support is a price cluster at 108.866 to 108.860. Resistance is a downtrending Gann angle at 109.082.

USD/JPY

The Dollar/Yen is trading nearly flat on Tuesday after surging higher earlier in the session. The price action suggests traders may be starting to square positions ahead of the U.S. bank holiday on Thursday. Positive news on the U.S.-China trade front is underpinning investor sentiment.

Demand for risky assets is helping to dampen demand for the safe-haven Japanese Yen. Furthermore, overnight volumes are well below average, which suggests the price action over the next few days will lack the conviction needed for a sustainable trend.

At 07:40 GMT, the USD/JPY is trading 108.966, up 0.040 or +0.04%.

USDJPY
Daily USD/JPY

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 109.488 will signal a resumption of the uptrend. The main trend will change to down on a move through 108.244.

The first minor range is 109.488 to 108.244. Its 50% level or pivot at 108.866 is support.

The second minor range is 107.891 to 109.488. Its 50% level or pivot at 108.690 is additional support.

Daily Technical Forecast

Based on the early price action, potential support is a price cluster at 108.866 to 108.860. Resistance is a downtrending Gann angle at 109.082.

Bullish Scenario

Since the main trend is up, buyers could come in on a test of the support cluster at 108.866 to 108.860. If they’re able to generate enough upside momentum then look for a retest of the downtrending Gann angle at 109.082.

A sustained move over 109.082 will indicate the buying is getting stronger. This could lead to a test of the next downtrending Gann angle at 109.285. This is the last potential resistance angle before the 109.488 main top.

Bearish Scenario

The inability to overcome 109.082 will indicate the presence of sellers. This could lead to a test of the support cluster at 108.866 to 108.860.

The Gann angle at 108.860 is a potential trigger point for an acceleration to the downside with the next targets a 50% level at 108.690 and an uptrending Gann angle at 108.588.

Side Notes

On a normal trading day, we’d be looking for strength over 109.082 and weakness under 108.860. We could still see that today, but the extremely low volume is likely to weigh on the success of the move.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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