USD/JPY Forex Technical Analysis – Heading into Major Support Zone at 109.360 to 109.179

Based on Monday’s close at 109.603, the direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to 109.555.
James Hyerczyk
USD/JPY
USD/JPY

Sellers continued to pound the Dollar/Yen on Monday in reaction to another drop in U.S. Treasury yields. Investors didn’t put much weight in the stock market rally, which posted gains for a third session. The primary focus for investors is on the direction of interest rates and expectations that the U.S. Federal Reserve will take a pause in policy and cut the number of expected rate hikes in 2019.

On Monday, the USD/JPY settled at 109.603, down 0.691 or -0.63%.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The downtrend was reaffirmed on Monday when sellers took out 109.990.

The USD/JPY is in no position to change the main trend to up, but it is in the window of time for a closing price reversal bottom. So be careful selling weakness, but watch for a lower-low, higher-close chart pattern. This will signal that the buying is greater than the selling at current price levels.

We’re not likely to see a closing price reversal bottom in the Dollar/Yen unless the Treasury note and Treasury bond rallies come to an end.

Daily Swing Chart Technical Forecast

Based on Monday’s close at 109.603, the direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to 109.555.

Bullish Scenario

A sustained move over 109.555 will indicate the return of buyers. If this move generates enough upside momentum then we could see a rally back to 110.584 over the near-term.

Bearish Scenario

A sustained move under 109.55 will signal the presence of sellers. This could generate the downside momentum needed to challenge the June 26 bottom at 109.360. This is followed by the June 18 main bottom at 109.179.

The daily chart is wide open to the downside under 109.179 with the May 29 bottom at 108.114 the primary downside target so don’t be surprised if we see an acceleration to the downside.

Closing Price Reversal Bottom Scenario

When a market is in a freefall or a prolonged move down in terms of price and time, often the only way to end the selling is with a closing price reversal bottom. While taking out 109.555 will indicate the presence of sellers, doing this then turning higher for the session will indicate the return of buyers. This often leads to the start of a 2 to 3 day counter-trend rally.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All

Top Promotions

Top Brokers

IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US