USD/JPY Forex Technical Analysis – Strengthens Over 108.735, Weakens Under 108.483

Based on the early price action and the current price at 108.601, the direction of the USD/JPY the rest of the session on Tuesday is likely to be determined by trader reaction to the uptrending Gann angle at 108.686.
James Hyerczyk

The Dollar/Yen is inching higher early Tuesday as it continues to hover just above last week’s low at 108.430. Although the Forex pair is attempting to establish a support base, the lack of follow-through to the upside suggests investors are still taking protection in the Japanese Yen against a potential meltdown in the U.S. stock market if the United States decides to impose new tariffs on Chinese imports on December 15.

At 07:11 GM%, the USD/JPY is trading 108.601, up 0.044 or +0.04%.

Besides the trade deal deadline, investors are monitoring Washington politics, the North American Free Trade Agreement deal and the U.K. Brexit vote later this week.


Daily Technical Analysis

The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on December 2 at 109.728.

Although the closing price reversal bottom on December 4 at 108.430 stopped the selling last week, the main trend will change to down on a move through 108.280.

The minor trend is also down. A trade through 108.997 will change the minor trend to up. This will also shift momentum to the upside.

The short-term range is 109.728 to 108.430. Its retracement zone at 109.079 to 109.232 is the next potential upside target and resistance area.

The main range is 106.485 to 109.728. Its retracement zone at 108.107 to 107.724 is support.

Daily Technical Forecast

Based on the early price action and the current price at 108.601, the direction of the USD/JPY the rest of the session on Tuesday is likely to be determined by trader reaction to the uptrending Gann angle at 108.686.

Bearish Scenario

A sustained move under 108.686 will indicate the presence of sellers. The first downside target is an uptrending Gann angle at 108.483, followed closely by the minor bottom at 108.430.

If 108.430 fails then look for the selling to extend into the main bottom at 108.280, followed closely by another uptrending Gann angle at 108.313.

Taking out 108.313 could trigger an acceleration to the downside into the main 50% level at 108.107.

Bullish Scenario

A sustained move over the uptrending Gann angle at 108.430 will signal the presence of buyers. This is followed closely by another uptrending Gann angle at 108.735.

The Gann angle at 108.735 is a potential trigger point for an acceleration to the upside with the next target angle coming in at 108.978. This is the last potential resistance angle before the 108.997 minor top and short-term 50% level at 109.079.

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