USD/JPY Forex Technical Analysis – Strengthens Over 108.752, Weakens Under 108.485

The Dollar/Yen is inching higher on Friday. Traders are showing little reaction to the new developments surrounding Brexit although there is some activity in other safe-haven assets. Volume is still light as investors begin to prepare for next week’s monetary policy and interest rate decisions from the U.S. Federal Reserve and the Bank of Japan. The Fed is widely expected to cut its benchmark interest rate by 25-basis points. Traders still aren’t sure if the BOJ will cut rates, but they are expecting stimulus.

At 06:16 GMT, the USD/JPY is trading 108.661, up 0.025 or +0.02%.

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 October 17.

A trade through 108.939 will negate the closing price reversal top and signal a resumption of the uptrend. The Forex pair is in no position to change the main trend to down, but there is room for a 50% to 61.8% correction of its last major rally.

The minor trend is also up. A trade through 108.252 will change the minor trend to down. This move will confirm the shift in momentum to down.

The minor range is 108.939 to 108.252. Its 50% level or pivot at 108.596 is controlling the direction of the USD/JPY on Friday.

The main range is 106.485 to 108.939. If the selling pressure accelerates through 108.252 then look for the move to possibly extend into 107.712 to 107.463 over the near-term.

Daily Technical Forecast

Based on the early price action and the current price at 108.661, the direction of the USD/JPY on Friday is likely to be determined by trader reaction to the minor pivot at 108.596.

Bullish Scenario

A sustained move over 108.596 will indicate the presence of buyers. The first target angle comes in at 108.752. This price is a potential trigger point for an acceleration into the last main top at 108.939.

Bearish Scenario

A sustained move under 108.596 will signal the presence of sellers. This should trigger a break into a downtrending Gann angle at 108.564 and an uptrending Gann angle at 108.485.

The Gann angle at 108.485 is a potential trigger point for an acceleration to the downside with the first target a minor bottom at 108.252. The daily chart is wide open under this level with the 50% level at 107.712 the next major downside target.