USD/JPY Forex Technical Analysis – Main Trend Up, but Momentum Trending Lower

Based on the early price action and the current price at 108.518, the direction of the USD/JPY the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at 108.408.
James Hyerczyk

The Dollar/Yen is trading slightly better on Monday, indicating that investors aren’t too worried about the outcome of Brexit at this time. Since the Yen is a safe-haven currency, if there were problems in the financial markets, investors would be seeking shelter in it. The early market action has U.S. equities and Treasury yields trending slightly higher. This is also weighing on the Yen’s appeal as a safe-haven asset.

At 04:45 GMT, the USD/JPY is trading 108.518, up 0.110 or +0.10%.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum is trending lower, following the closing price reversal top at 108.939 on October 17 and its subsequent confirmation the next day.

A trade through 108.939 will negate the chart pattern and signal a resumption of the uptrend. A trade through today’s intraday low at 108.293 will signal the return of sellers. The main uptrend is safe for now, however. It will change to down on a move through 106.485.

The short-term range is 106.485 to 108.939. Its 50% level at 107.712 is the first downside target.

The major range is 109.317 to 104.600. Its retracement zone at 107.463 to 106.890 is the next downside target zone.

The range since late August is 104.463 to 108.939. Its retracement zone is 106.701 to 106.173.

Combining the retracement zones makes 106.890 to 106.701 the key area to watch for buyers if tested.

Daily Swing Chart Technical Forecast

Based on the early price action and the current price at 108.518, the direction of the USD/JPY the rest of the session on Monday is likely to be determined by trader reaction to Friday’s close at 108.408.

Bullish Scenario

A sustained move over 108.408 will indicate the presence of buyers. The first upside target is a minor 50% level at 108.616. If this market is getting ready to turn lower, then sellers are likely to come in at 108.816. Overcoming this level, however, could trigger a surge into 108.939.

Bearish Scenario

The inability to overcome 108.616 will signal the presence of sellers. Turning lower for the session will indicate the selling pressure is getting stronger. This could trigger an acceleration to the downside with the first target the short-term 50% level at 107.712.

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