USD/JPY Forex Technical Analysis – Key Support Cluster at 106.706 to 106.450

The Dollar/Yen jumped on Thursday as investors focused on month-end rebalancing of their portfolios. According to Reuters, the cross-currency basis swap for swapping three-month Yen LIBOR for dollar LIBOR also turned negative for the first time in a month, indicating strong demand for dollars against the Japanese currency for the end of the month.

On Thursday, the USD/JPY settled at 107.161, up 0.571 or +0.54%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 108.083 will change the main trend to up. A move through 106.360 will signal a resumption of the downtrend.

The intermediate range is 101.185 to 111.715. Its retracement zone at 106.450 to 105.207 is support. This zone stopped the selling on Wednesday at 106.360.

The main range is 112.226 to 101.185. The USD/JPY settled inside its retracement zone at 106.706 to 108.008. The zone is controlling the near-term direction of the Forex pair.

The short-term range is 111.715 to 106.360. If the trend changes to up then its retracement zone at 109.038 to 109.669 will become the primary upside target.

Daily Swing Chart Technical Forecast

The USD/JPY settled inside the main retracement zone.

On the downside, the support is a pair of 50% levels at 106.706 and 106.450 and a minor bottom at 106.360. Taking out the latter could trigger an acceleration to the downside with 105.207 the next likely downside target.

If Thursday’s upside momentum continues then look for a surge into the resistance cluster formed by the Fibonacci level at 108.008 and the main top t 108.083.