USD/JPY Forex Technical Analysis – Rangebound with 114.029 Resistance, 113.173 Support

The Dollar/Yen is trading lower for the session, but inside Friday’s range, suggesting investor indecision and impending volatility. The price action was primarily driven by choppy price action in the Treasury market before yields finished flat. The movement in yields and the Dollar/Yen reflects growing concerns that the omicron Covid variant will derail the global recovery.

At 21:12 GMT, the USD/JPY is trading 113.656, down 0.059 or -0.05%. The Invesco CurrencyShares Japanese Yen Trust is at $82.57, up $0.03 or +0.04%.

Early in the session, the USD/JPY weaken after Asian equities and oil prices traded lower on Monday following the reimposition of some COVID-19 restrictions in Europe. The weakness drove up the safe-haven appeal of the Japanese Yen.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 114.262 will change the main trend to up. A move through 112.538 will signal a resumption of the downtrend.

The minor range is 114.262 to 113.148. The USD/JPY is trading on the weak side of its pivot at 113.705, making it resistance.

The short-term retracement zone at 115.519 to 112.538. Its retracement zone at 114.029 to 114.380 is the main resistance zone.

The main range is 110.826 to 115.519. Its retracement zone at 113.173 to 112.619 is controlling the near-term direction of the USD/JPY.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY late in the session on Monday and early Tuesday will be determined by trader reaction to 113.705.

Bearish Scenario

A sustained move under 113.705 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the support cluster at 113.173 – 113.148.

Bullish Scenario

A sustained move over 113.705 will signal the presence of buyers. If this move generates enough upside momentum then look for a surge into 114.029 to 114.380. Inside this zone is a main top at 114.262, making it a solid resistance area.