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USD/JPY Forex Technical Analysis – Holding 112.175 Sets Up Rally into 113.101 to 113.450

By:
James Hyerczyk
Published: Oct 21, 2018, 05:21 UTC

Based on Friday’s price action, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the main 50% level at 112.175.

Japanese Yen

A rise in U.S. Treasury yields and an easing of tensions over stock market volatility helped boost the Dollar/Yen on Friday. Rising yields helped make the U.S. Dollar a more attractive investment because it widened the spread between U.S. Government bonds and Japanese Government bonds. The mixed performance in the major stock indexes encouraged some investors to lift their safe haven hedges in the Japanese Yen.

On Friday, the USD/JPY settled at 112.534, up 0.342 or +0.30%.

USDJPY
Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 111.622 will signal a resumption of the downtrend. The main trend will change to up on a move through 114.580.

The minor trend is also down. A trade through 112.730 will change the minor trend to up. This will also shift momentum to the upside. A trade through 111.622 will indicate the selling pressure is getting stronger.

The main range is 109.770 to 114.580. Its retracement zone is 112.175 to 111.607. This zone is controlling the near-term direction of the USD/JPY. Holding above this zone will give the Forex pair an upside bias.

Daily Swing Chart Technical Forecast

Based on Friday’s price action, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the main 50% level at 112.175.

A sustained move over 112.175 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of last week’s high at 112.730.

Taking out 112.730 could trigger a spike into the 50% level at 113.101. Since the main trend is down, look for sellers to show up on the first test of this level. Overtaking it could trigger a further rally into the Fibonacci level at 113.450.

A sustained move under 112.175 will signal the presence of sellers. This is a potential trigger point for an acceleration into 111.622, followed by 111.607.

Look for the USD/JPY to continue to edge higher as long as Treasury yields remain firm and the stock market steady.

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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