USD/JPY Forex Technical Analysis – September 3, 2019 Forecast

The Dollar/Yen is trading slightly higher early Tuesday with the greenback supported by rising U.S. Treasury yields and a slight increase in demand for higher risk assets. These two factors are likely to control the direction of the Forex pair throughout the week, but the catalysts behind the price action will be Tuesday’s U.S. ISM Manufacturing PMI report, the resumption of U.S.-China trade talks and Friday’s U.S. Non-Farm Payrolls report.

At 04:06 GMT, the USD/JPY is trading 106.317, up 0.105 or +0.10%.

Daily Technical Analysis

The main trend is down according to the daily swing chart. However, momentum has been trending higher since the formation of the closing price reversal bottom at 104.463 on August 26.

The main trend will change to up on a trade through 109.317. This is highly unlikely, however, the Forex pair is in a position to challenge a pair of minor tops and a retracement zone. A move through 104.463 will negate the closing price reversal bottom and signal a resumption of the downtrend.

The minor trend is also down. A trade through 106.976 will change the minor trend to up. This will reaffirm the shift in momentum to up. A move through 107.086 will reaffirm the minor trend.

The minor range is 106.976 to 104.463. Its 50% level or pivot at 105.720 is providing support and controlling the short-term direction of the USD/JPY.

The short-term range is 109.317 to 104.463. Its retracement zone at 106.890 to 107.463 is the primary upside target. This zone is also controlling the near-term direction of the Forex pair.

Daily Technical Forecast

Based on the early price action and the current price at 106.317, the direction of the USD/JPY the rest of the session on Tuesday is likely to be determined by trader reaction to the downtrending Gann angle at 106.442.

Bearish Scenario

A sustained move under 106.442 will indicate the presence of sellers. The first downside target is an uptrending Gann angle at 105.963. If this angle fails as support then look for the selling to possible extend into the pivot at 105.720. Counter-trend buyers could come in on a test of this level.

The pivot at 105.720 is also the trigger point for an acceleration to the downside with the next target angle coming in at 105.213.

Bullish Scenario

Taking out the angle at 106.442 and sustaining the rally will signal the presence of buyers. This could trigger a rally into the 50% level at 106.890, followed by the minor tops at 106.976 and 107.086.