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USD/JPY Forex Technical Analysis – Supported by Firm Yields Ahead of Consumer Confidence, Home Prices Data

By:
James Hyerczyk
Updated: Jun 28, 2022, 10:02 UTC

Investors have become increasingly concerned about the prospect of a recession as the Federal Reserve tries to cool red-hot inflation.

USD/JPY

In this article:

The Dollar/Yen is edging higher on Tuesday as U.S. Treasury yields firmed for a third straight session, ahead of a fresh batch of U.S. data that could offer clues on the health of the economy.

The price action has been choppy lately as investors have become increasingly concerned about the prospect of a recession in recent weeks as the Federal Reserve tries to cool red-hot inflation with a series of aggressive rate hikes.

At 09:30 GMT, the USD/JPY is trading 135.860, up 0.382 or +0.28%. On Monday, the Invesco CurrencyShares Japanese Yen Trust settled at $69.09, down $0.13 or -0.18%.

Several US Economic Reports on Tap as Volume Fades

Volume was light on Monday and conditions could continue to soften all week ahead of next Monday’s U.S. Independence Day holiday. The low volume could produce exaggerated responses to today’s slew of U.S. economic reports.

On the data front, advance economic indicators for May will be released at around 12:30 GMT, with the S&P CoreLogic Case-Shiller national home price index for April and the Federal Housing Finance Agency home pricing index for April set to follow slightly later in the session.

Consumer confidence figures and Richmond Fed surveys for June will both be published at 14:00 GMT.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum is trending lower.

A trade through 136.715 will signal a resumption of the uptrend. A move through 131.495 will change the main trend to down.

The minor trend is also up. A trade through 134.269 will change the minor trend to down. This will also confirm the shift in momentum.

The minor range is 136.715 to 134.269. The USD/JPY is currently trading on the strong side of its pivot at 135.492, making it support.

The short-term range is 131.495 to 136.715. Its retracement zone at 134.105 to 133.489 is support.

Daily Swing Chart Technical Forecast

Trader reaction to the minor pivot at 135.492 is likely to determine the direction of the USD/JPY on Tuesday.

Bullish Scenario

A sustained move over 135.492 will indicate the presence of buyers. A rise in Treasury yields could create the momentum needed to drive the USD/JPY into the last main top at 136.715.

Bearish Scenario

A sustained move under 135.492 will signal the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the minor bottom at 134.269, followed by the short-term retracement zone at 134.105 – 133.489.

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

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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