USD/JPY Forex Technical Analysis – Recovering 108.230 Could Trigger an Acceleration to the Upside

The Dollar/Yen hit its lowest level since March 5 early in the session on Wednesday as a safety bid continued to bolster demand for the Japanese Yen. The move is being fueled as flare up in coronavirus infections from India to Canada soured the outlook for a quick global recovery.

At 04:20 GMT, the USD/JPY is trading 108.042, down 0.043 or -0.04%.

India reported 1,761 deaths from COVID-19, its highest daily toll, while Canada and the United States extended a land-border closure for non-essential travelers.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The trend turned down earlier in the week when sellers took out the main bottom at 108.407.

A trade through 110.966 will change the main trend to up. This is highly unlikely, but due to the prolonged move down in terms of price and time, the USD/JPY remains inside the window of time for a closing price reversal bottom.

The minor trend is also down. A trade through 109.961 will change the minor trend to up. This will shift momentum to the upside.

The main range is 111.715 to 102.593. The USD/JPY is currently testing its retracement zone at 107.154 to 108.230.

The short-term range is 102.593 to 110.966. If the main retracement zone fails then look for the selling pressure to possibly extend into its retracement zone at 106.780 to 105.791.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to 108.085.

Bearish Scenario

A sustained move under 108.085 will indicate the presence of sellers. If this continues to generate enough downside momentum then look for the Dollar/Yen to eventually trade into 107.154 to 106.780.

Bullish Scenario

A sustained move over 108.085 will signal the presence of buyers. If this move creates enough upside momentum then look for a drive through 108.230. This is a potential trigger point for an acceleration to the upside.

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