USD/JPY Forex Technical Analysis – March 8, 2019 Forecast

The Dollar/Yen is trading sharply lower on Friday as investors continue to seek shelter in the safe-haven Japanese Yen. Weaker equity markets and plunging U.S. Treasury yields are helping to drive the price action. Global equities are weaker for a second day after the European Central Bank stoked economic growth concerns.

Risk aversion was highlighted on Thursday after the ECB pushed back the timing of its first post-crisis interest rate hike to 2020, cut its economic forecasts and launched a new round of cheap bank loans. Traders are now shifting their focus to the February U.S. Non-Farm Payrolls report, which is scheduled to be released at 13:30 GMT. A bullish report could trigger a short-covering rally.

At 04:53 GMT, the USD/JPY is trading 111.264, down 0.330 or -0.30%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through 112.137 will reaffirm the uptrend. The main trend will change to down on a trade through 110.350.

The short-term range is 110.350 to 112.137. Its retracement zone at 111.244 to 111.033 is the first downside target. The USD/JPY is currently testing this zone. This zone is controlling the near-term direction of the Forex pair. Since the main trend is up, buyers could come in on the first test of this area.

Daily Technical Forecast

Based on the early price action, the direction of the USD/JPY the rest of the session is likely to be determined by trader reaction to the support cluster at 111.244 to 111.225.

Bullish Scenario

A sustained move over 111.244 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for the rally to possibly extend into the downtrending Gann angle at 111.762. Overtaking this angle could trigger a further rally into the next downtrending Gann angle 111.950.

Bearish Scenario

A sustained move under 111.225 will signal the presence of sellers. This is a potential trigger point for an acceleration into the short-term Fibonacci level at 111.033. Look for a technical bounce on the first test of this level. If it fails then look for the selling to possibly extend into the next uptrending Gann angle at 110.788.