USD/JPY Forex Technical Analysis – October 16, 2018 Forecast

Based on the current price at 111.990, the direction of the USD/JPY the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at 111.984.
James Hyerczyk
JPY Notes
JPY Notes

The Dollar/Yen is trading higher early Tuesday. The Forex pair is being supported by increased demand for higher risk assets, firmer U.S. Treasury yields and a slightly better U.S. Dollar. On Monday, a weaker stock market, a dip in U.S. Treasury yields and weaker-than-expected U.S. Retail Sales helped make the Japanese Yen a more desirable currency.

At 0415 GMT, the USD/JPY is trading 111.990, up 0.216 or +0.19%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 114.580 will change the main trend to up. The next downside target is the main bottom at 110.379.

The price action is currently being controlled by a pair of retracement zones.

The main range is 109.770 to 114.580. Its retracement zone is 112.175 to 111.607.

The minor range is 110.379 to 114.580. Its retracement zone is 112.480 to 111.984.

Combining the two retracement zones creates a price cluster at 112.175 to 111.984. This zone is controlling the shorter-term direction of the USD/JPY.

Daily Swing Chart Technical Forecast

Based on the current price at 111.990, the direction of the USD/JPY the rest of the session is likely to be determined by trader reaction to the short-term Fibonacci level at 111.984.

A sustained move over 111.984 will indicate the presence of buyers. The next target is a 50% level at 112.175. This is followed by another 50% level at 112.480.

The 50% level at 112.480 stopped the market twice last week so look for sellers on the first test of this level. However, overtaking it will likely trigger an acceleration to the upside.

The inability to overcome 111.984 will indicate the presence of sellers. This could trigger a retest of the main Fibonacci level at 111.607. This level provided support on Monday.

The daily chart opens up to the downside under 111.607 with 110.379 the next major target. This move is likely to produce an acceleration to the downside.

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