James Hyerczyk
Add to Bookmarks

The Dollar/Yen is trading nearly flat during a low volume, low volatility session on Thursday. The early moves were slight and Asia trade thinned by Lunar New Year holidays in Japan and China.

The move comes after a drop on Wednesday was fueled by weak U.S. consumer inflation data. According to a government report, U.S. core inflation in January was zero, coming in well-below market expectations calling for a gain of 0.2%.

Know where the Market is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

At 08:10 GMT, the USD/JPY is trading 104.631, up 0.025 or +0.02%.

In other news, in a speech, Federal Reserve Chair Jerome Powell focused on still-high unemployment and reiterated that the central bank’s new policy framework could accommodate annual inflation above 2% for some time before hiking rates.


Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of a potentially bearish closing price reversal top on February 5.

A trade through 105.768 will negate the closing price reversal top and signal a resumption of the uptrend.

The main trend will change to down on a move through 103.328, but sellers are going to have to take out a short-term retracement zone before we’ll see that.

The main range is 107.049 to 102.593. The USD/JPY is currently trading on the weak side of its retracement zone at 104.821 to 105.347. This area is potential resistance.

The short-term range is 103.328 to 105.768. Its retracement zone at 104.548 to 104.260 is potential support. This zone stopped the selling on Wednesday at 104.410.


Daily Swing Chart Technical Forecast

The early price action suggests the direction of the USD/JPY today will be determined by trader reaction to the short-term 50% level at 104.548.

Bullish Scenario

A sustained move over 104.548 will indicate the presence of buyers. The first upside target is the main 50% level at 104.821.

Overtaking 104.821 could extend the rally into the minor 50% level at 105.089. Aggressive counter-trend sellers could come in on a test of this level. They are going to try to form a potentially bearish secondary lower top.

Bearish Scenario

A sustained move under 104.548 will signal the presence of sellers. Taking out yesterday’s low at 104.410 should lead to a test of the short-term Fibonacci level at 104.260. This is a potential trigger point for an acceleration to the downside with 103.328 the next near-term target.

For a look at all of today’s economic events, check out our economic calendar.
Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker