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

The Dollar/Yen soared on Wednesday, reversing the previous session’s weakness as increased demand for risky assets encouraged investors to dump the safe-haven Japanese Yen. Traders said the sudden turnaround in the Forex pair was fueled by upbeat comments from President Trump about a trade deal with China and the discounting of the impeachment inquiry on Trump making much headway in the short-term.

At 02:06 GMT, the USD/JPY is trading at 107.686, down 0.077 or -0.07% on Wednesday, the Forex pair surged 0.799 or 0.75%.

At 06:35 GMT, Bank of Japan Governor Kuroda is scheduled to deliver a speech that could move the Forex pair. Kuroda is likely to reiterate comments from earlier in the week by keeping alive the possibility of a rate cut at the end of October. He’s also likely to reemphasize his view that short-term rates have a more powerful impact on the economy than long-term rates.

Later in the session at 12:30 GMT, traders will get the opportunity to react to the latest data on U.S. GDP. The report on Final GDP is expected to show the economy grew 2.0% last quarter.

Daily Technical Analysis

The main trend is down according to the daily swing chart. A trade through 108.478 will change the main trend to up. A move through 106.963 will signal a resumption of the downtrend.

The main range is 109.317 to 104.463. The USD/JPY is currently trading on the strong side of its retracement zone at 107.463 to 106.890, making this zone support.

The minor range is 108.478 to 106.963. Its retracement zone at 107.721 to 107.899 is providing resistance.

Daily Technical Forecast

Based on the early price action and the current price at 107.686, the direction of the USD/JPY the rest of the session on Thursday is likely to be determined by trader reaction to the minor 50% level at 107.721.

Bullish Scenario

A sustained move over 107.721 will indicate the presence of buyers. If this produces enough upside momentum then look for a surge into the minor Fibonacci level at 107.899, followed by a downtrending Gann angle at 108.067. This angle is a potential trigger point for an acceleration to the upside with the main top at 108.478 the next likely upside target.

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, followed by an uptrending Gann angle at 107.338. The latter is a potential trigger point for an acceleration to the downside with the next targets 106.963 to 106.890.