USD/JPY Forex Technical Analysis – Moving Back to the Strong Side of Major Retracement Zone at 110.662 to 110.061

The Dollar/Yen is trading higher early Tuesday. The Forex pair is being underpinned by an easing of tensions in Turkey and rising U.S. Treasury yields. Technical factors also played a role in stopping the price slide on Monday as buyers came in near the bottom of a major retracement range.

At 0340 GMT, the USD/JPY is trading 110.860, up 0.130 or +0.12%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 110.588 last week changed the trend to down. The main trend will change to up on a move through 112.152, the downtrend will resume on a move through 110.100.

The main range is 108.114 to 113.210. Its retracement zone at 110.662 to 110.061 provided support on Monday when the Dollar/Yen reached its low at 110.100.

The new short-term range is 112.152 to 110.100. Its retracement zone at 111.126 to 111.368 is the first upside target. Since the trend is down, sellers could show up on the first test of this zone.

Daily Technical Forecast

Based on the early trade, the direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to the main 50% level at 110.662.

A sustained move over 110.662 will indicate the presence of buyers. This could trigger a rally into a downtrending Gann angle at 110.960. Look for sellers on the first test of this angle. Taking it out could trigger a spike into the retracement zone at 111.126 to 111.368. Once again, sellers could show up. However, taking out 111.368 will indicate the buying is getting stronger.

A sustained move under 110.662 will signal the presence of sellers. The daily chart is wide open under this level so we could see a resumption of the selling pressure with the next targets yesterday’s low at 110.100 and the major Fibonacci level at 110.061. These levels are followed by a long-term uptrending Gann angle at 109.833.