USD/JPY Forex Technical Analysis – Inside Move Being Fueled by Light Holiday Volume

The Dollar/Yen is inching lower early Monday on extremely low volume that investors are blaming on bank holidays in Australia, New Zealand China and Hong Kong. Nonetheless, many traders believe the U.S. Dollar is poised to extend gains against the Japanese Yen after the U.S. jobs report at the end of last week showed the nation’s labor market is recovering from the impact of the coronavirus shock.

At 02:15 GMT, the USD/JPY is trading 110.576, down 0.068 or -0.06%.

The U.S. economy created more jobs than expected in March, data showed on Friday. However, there was scant reaction in currencies as most major stock and bond markets were closed for Easter holidays.

In other news, a survey from the Institute for Supply Management due later on Monday is expected to show U.S. non-manufacturing activity expanded at a faster rate ibn March, which could underpin the greenback on its forward march. Traders expect the ISM Services PMI to come in at 58.3, up from 55.3.

Daily Swing Chart Technical Analysis

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

The minor range is 108.407 to 110.966. Its 50% level at 109.687 is the primary downside target.

Daily Swing Chart Technical Forecast

The USD/JPY is currently trading inside its March 31 range for a third session on Monday. This move typically indicates investor indecision and impending volatility. Therefore, trader reaction to 110.966 and 110.275 will determine the direction of the Forex pair today.

Bullish Scenario

A sustained move over 110.966 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the March 24, 2020 main top at 111.715.

Bearish Scenario

A sustained move under 110.275 will signal the presence of sellers. If this move generates enough downside momentum then look for a break into the minor pivot at 109.687. Since the main trend is up, buyers could come in on a test of this level.