USD/JPY Forex Technical Analysis – Strengthens Over 108.311, Weakens Under 108.102

Based on the trade the last two sessions, the direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to 108.311.
James Hyerczyk

The Dollar/Yen finished slightly lower on Wednesday, while trading inside the previous day’s range. The price action suggests investor indecision and impending volatility. Investors showed little reaction to a volatile Treasury market where yields dipped and firmed during the same session. The price action suggests investors may be already squaring positions ahead of today’s European Central Bank monetary policy decisions and next week’s interest rate decisions from the U.S. Federal Reserve and Bank of Japan.

On Wednesday, the USD/JPY settled at 108.179, down 0.043 or -0.04%.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. The main trend will change to up on a trade through 108.991. A move through 107.212 will signal a resumption of the downtrend.

The minor trend is also down. A trade through 108.375 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 108.991 to 107.212. Its retracement zone at 108.102 to 108.311 is currently being tested. The direction of the USD/JPY on Thursday is likely to be determined by trader reaction to this zone.

On the downside, the nearest support is the intermediate retracement zone at 107.883 to 107.622.

The main range is 110.677 to 106.775. If the minor trend changes to up then its retracement zone at 108.726 to 109.186 is likely to become the next upside target. This zone is resistance. It stopped the rally on July 10 at 108.991.

Daily Swing Chart Technical Forecast

Based on the trade the last two sessions, the direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to 108.311.

Bullish Scenario

A sustained move over 108.311 will indicate the presence of buyers. A drive through 108.375 will change the minor trend to up. This could generate the upside momentum needed to challenge the main 50% level at 108.726.

Bearish Scenario

A sustained move under 108.311 will signal the presence of sellers. They are defending against a breakout to the upside. The first downside target is the short-term 50% level at 108.102.

If 108.102 fails as support then look for a potential break into the intermediate 50% level at 107.883, followed by the intermediate Fibonacci level at 107.622.

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
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.
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.