USD/JPY Forex Technical Analysis – Strengthens Over 107.899, Weakens Under 107.721

Based on Friday’s price action and the close at 107.938, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the minor 50% level at 107.721 and the minor Fibonacci level at 107.899.
James Hyerczyk
USD/JPY

The Dollar/Yen closed higher on Friday, but off its high as safe-haven buying encouraged long investors to trim positions and book profits ahead of the week-end after an impressive three day rally. The Forex pair was also supported by a better-than-expected Core Durable Goods Orders report and a disappointing inflation report from Japan.

On Friday, the USD/JPY settled at 107.938, up 0.094 or +0.09%.

The USD/JPY weakened late in the session as U.S. equity indexes declined into the close and safe-haven buying drove Treasury yields lower.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. Despite the more than month long rally, the main trend hasn’t turned up. It’s been driven by short-covering. The main trend will turn to up on a trade through 108.478. A move through 106.963 will signal a resumption of the downtrend.

The minor trend is also down. It turned down on September 23. The three day counter-trend rally may be an attempt to shift momentum to the upside.

The main range is 109.317 to 104.463. Its retracement zone at 107.463 to 106.890 is support. Holding above this zone means buyers are trying to sustain an upside bias.

The minor range is 108.478 to 106.963. Its retracement zone is 107.721 to 107.899. This area could be a launching pad for a surge into 108.478, or a break into 107.463 to 106.890.

Daily Swing Chart Technical Forecast

Based on Friday’s price action and the close at 107.938, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the minor 50% level at 107.721 and the minor Fibonacci level at 107.899.

Bullish Scenario

A sustained move over 107.899 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the main top at 108.478. Taking out this level will change the main trend to up. This could trigger an acceleration to the upside with the August 1 top at 109.317 the next likely upside target. It all depends on the size of the buying volume.

Bearish Scenario

A sustained move under 107.721 will signal the presence of sellers. This could trigger a break into the main Fibonacci level at 107.463. This is a potential trigger point for an acceleration into the main bottom at 106.963, followed closely by the main 50% level at 106.890.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US