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James Hyerczyk
USD/JPY

The Dollar/Yen is trading nearly flat on Wednesday after a steep break the previous session. The recent weakness in the Forex pair is being driven by falling U.S. Treasury yields, which are making the U.S. Dollar a less-attractive asset.

On Tuesday, U.S. Treasury yields dipped as the S&P 500 and the Dow Jones Industrial Average settled back below their record highs.

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The yield on the benchmark 10-year Treasury note fell to 1.654% in afternoon trading. The yield on the 30-year Treasury bond slipped to 2.316%.

At 05:33 GMT, the USD/JPY is trading 109.808, up 0.066 or +0.06%.

In economic news, the U.S. Bureau of Labor Statistics’ February survey of job openings and labor turnover in the U.S. showed a modest increase in job openings and hiring on Tuesday. That data from a period before last week’s nonfarm payroll report, which showed more than 900,000 jobs added in March.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 110.966 will signal a resumption of the uptrend. The main trend will change to down on a trade through 108.407.

The short-term range is 108.407 to 110.966. The USD/JPY is currently testing its retracement zone at 109.687 to 109.385.

The new minor range is 110.966 to 109.580. Its 50% level at 110.273 is potential resistance. This level will move down as the Forex pair moves lower.

The major support and potential downside target is 108.230 to 107.154. This area is controlling the near-term direction of the USD/JPY.

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Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to the short-term 50% level at 109.687.

Bullish Scenario

A sustained move over 109.687 will indicate the presence of buyers. If this move creates enough upside momentum then look for a surge into the minor pivot, currently at 110.273.

Bearish Scenario

A sustained move under 109.687 will signal the presence of sellers. The first downside target is the short-term Fibonacci level at 109.385. Although buyers could come in on a test of this level since the main trend is up, it also serves as a potential trigger point for an acceleration to the downside with 108.407 to 108.230 the next likely downside target.

For a look at all of today’s economic events, check out our economic calendar.

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