USD/JPY Forex Technical Analysis – Strengthens Over 108.985, Weakens Under 107.598

Based on the early price action and the current price at 108.773, the direction of the USD/JPY the rest of the session on Thursday is likely to be determined by trader reaction to the downtrending Gann angle at 107.598.
James Hyerczyk
USD/JPY

The Dollar/Yen is trading flat early Thursday for a second session on light volume as traders continue to try to gauge investor sentiment. In other words, uncertainty as to whether we’re in a “risk-on” or “risk-off” environment is helping to hold prices in a tight range.

Earlier in the week, stocks rallied on the back of the announcement of a partial trade deal between the United States and China on Friday, robust U.S. earnings reports and optimism over a Brexit deal. However, the rally came to a halt and the trading ranges tightened as concerns were raised over U.S.-China trade relations, optimism over Brexit faded and the chances of a Fed rate cut rose after the U.S. reported weaker-than-expected retail sales.

At 02:53 GMT, the USD/JPY is trading 108.773, up 0.013 or +0.01%.

Daily USD/JPY

Daily Technical Analysis

The main trend is up according to the daily swing chart. A trade through Tuesday’s high at 108.899 will signal a resumption of the uptrend. A trade through 106.485 will change the main trend to down. This is highly unlikely, however, the Dollar/Yen is up 10 sessions from its last main bottom, which puts the Forex pair inside the window of time for a potentially bearish closing price reversal top.

The main range is 109.317 to 104.463. Its retracement zone at 107.463 to 106.890 is support. This zone is also controlling the near-term direction of the USD/JPY.

Daily Technical Forecast

Based on the early price action and the current price at 108.773, the direction of the USD/JPY the rest of the session on Thursday is likely to be determined by trader reaction to the downtrending Gann angle at 107.598.

Bullish Scenario

A sustained move over 107.598 will indicate the presence of buyers. If this move can create enough upside momentum to sustain the rally then look for buyers to make a run at the uptrending Gann angle at 108.985.

Overtaking 108.985 will indicate the buying is getting stronger. This could trigger a rally into another uptrending Gann angle at 109.213. Crossing to the strong side of this uptrending Gann angle will put the USD/JPY in a bullish position with the main top at 109.317 the next likely upside target.

Bearish Scenario

The inability to overcome 108.985 will signal the presence of sellers, but a break under the downtrending Gann angle at 107.598 could trigger an acceleration to the downside with the next potential downside target an uptrending Gann angle at 107.735.

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