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James Hyerczyk
USD/JPY

The Dollar/Yen is trading slightly higher early Friday. The tight trading range and relatively low volume indicates the major players are sitting on the sidelines ahead of the release of the U.S. Non-Farm Payrolls report at 12:30 GMT. The results of the report should set the tone for the rest of the session.

At 06:21 GMT, the USD/JPY is trading 107.009, up 0.068 or +0.05%.

Daily USD/JPY

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. A move through 104.463 will signal a resumption of the downtrend.

The minor trend is up. This confirms the shift in momentum. A trade through 105.743 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 109.317 to 104.463. Its retracement zone at 106.890 to 107.463 is currently being tested. This zone is controlling the near-term direction of the USD/JPY.

The minor range is 104.463 to 107.231. Its 50% level or pivot at 105.847 is a possible downside target.

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Daily Technical Forecast

Based on yesterday’s close at 106.941 and the current price action, the direction of the USD/JPY the rest of the session on Friday is likely to be determined by trader reaction to the main 50% level at 106.890.

Bullish Scenario

A sustained move over 106.890 will indicate the presence of buyers. The first two upside targets are yesterday’s high at 107.231 and the main Fibonacci level at 107.463. Taking out the Fib level could trigger a rally into the downtrending Gann angle at 107.692.

Since the main trend is down, sellers could come in at 107.692. However, this angle is also the trigger point for an acceleration to the upside with the next target angle coming in at 108.505.

Bearish Scenario

A sustained move under 106.890 will signal the presence of sellers. The first target is an uptrending Gann angle at 106.713. This angle is a potential trigger point for an acceleration to the downside with targets coming in at 106.067, 105.847 and 105.743.

Overview

You can also use the main retracement zone as trigger points for accelerations. Look for an upside bias to develop on a sustained move over 107.463, and for a downside bias to develop on a sustained move under 106.890.

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