USD/JPY Forex Technical Analysis – July 10, 2019 Forecast

The Dollar/Yen is inching higher early Wednesday as investors await the start of two days of Congressional testimony by U.S. Federal Reserve Chairman Jerome Powell and the release of the minutes from the Federal Reserve’s June 18-19 monetary policy meeting. Both events should have an impact on U.S. interest rates, which should trigger a reaction by the U.S. Dollar.

At 04:35 GMT, the USD/JPY is trading 108.875, up 0.015 or +0.02%.

Most traders expect the Fed Chair to hint at a 25-basis point rate cut due to weak inflation and worries about the U.S.-China trade war. However, the Dollar/Yen could continue to rise if Powell’s remarks on the U.S. economy are perceived as neutral or even slightly hawkish.

Daily Technical Analysis

The main trend is up according to the daily swing chart. Since reaching a bottom at 106.775 on June 25, the USD/JPY has now taken out three main tops at 108.534, 108.728 and 108.805. If the rally continues then 109.930 will become the next upside target.

The trend will change to down on a trade through 107.534. The USD/JPY is also up 11 sessions from the June 25 bottom, which puts it in the window of time for a closing price reversal top.

The short-term range is 110.677 to 106.775. Its retracement zone at 108.726 to 109.186 is currently being tested. This range could become resistance if Powell is dovish.

The main range is 112.405 to 106.775. Its retracement zone at 109.590 to 110.254 is the next upside target. Sellers could come in on a test of this zone.

Daily Technical Forecast

Based on the early price action, the direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to the downtrending Gann angle at 108.968.

Bullish Scenario

A sustained move over 108.968 will indicate the presence of buyers. The next target is the short-term Fibonacci level at 109.186. Overtaking this level could trigger a surge into a resistance cluster at 109.525 to 109.590.

Crossing to the strong side of the 50% level at 109.590 will put the USD/JPY in a bullish position.

Bearish Scenario

A sustained move under 108.968 will signal the presence of sellers. The first target is the 50% level at 108.726. This level is a potential trigger point for an acceleration to the downside with the next target angle coming in at 108.150. This is another trigger point for a steep break with potential targets coming in at 107.534 and 107.463.