USD/JPY Forex Technical Analysis – Poised to Extend the Selling Pressure Under Major Fib Level at 106.440

The Dollar/Yen is trading lower early Friday in response to a report from the Washington Post that U.S. President Donald Trump would remove his national security adviser, H.R. McMaster, added to concerns about recent personnel changes and what that meant for government policy.

At 0650 GMT, the USD/JPY is trading 105.924, down 0.410 or -0.39%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 107.286 will change the main trend to up. A move through 105.243 will reaffirm the downtrend.

The major, long-term retracement zone is 108.773 to 106.440. The USD/JPY is currently trading below this range, giving it a downside bias.

The short-term range is 105.243 to 107.286. The Dollar/Yen is also trading below its retracement zone at 106.265 to 106.023, further indicating that the selling is greater than the buying at current price levels.

Daily Swing Chart Technical Forecast

Based on the current price at 105.924 and the earlier price action, 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 106.023.

A sustained move under 106.023 will indicate the presence of sellers. This could lead to a challenge of yesterday’s low at 105.779. Taking out this level with rising trading volume could trigger an acceleration to the downside with the next likely target the March 2 bottom at 105.243.

A sustained move over 106.023 will signal the presence of buyers. This could lead to a labored rally with early targets coming in at 106.265 and 106.440.

The short-covering rally could gain traction if enough buyers come in over 106.440. If this move generates enough upside momentum, we could see an eventual challenge of the March 13 main top at 107.286.