USD/JPY Forex Technical Analysis – Sustained Move Under 113.744 Targets 113.173 – 112.619

The Dollar/Yen is trading lower on Friday as investors moved into the safety of the Japanese Yen as Omicron worries simmered. Dr. Anthony Fauci, President Joe Biden’s top medical advisor, said Thursday that omicron will become the dominant COVID-19 variant in the United States within a few weeks, urging people to get vaccines and booster shots to fight it off.

At 07:02 GMT, the USD/JPY is trading 113.549, down 0.145 or -0.13%. On Thursday, the Invesco CurrencyShares Japanese Yen Trust EFT (FXY) settled at $82.58, up $0.26 or +0.32%.

In other news, the Bank of Japan (BOJ) dialed back emergency pandemic-funding but maintained ultra-loose policy and extended financial relief for small firms, cementing expectations it will remain among the most dovish central banks for the foreseeable future.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending lower. A trade through 114.262 will change the main trend to up. A move through 112.538 will signal a resumption of the downtrend.

The minor trend is up. This is controlling the momentum. A move through 113.225 will change the minor trend to down.

The minor range is 113.225 to 114.262. The USD/JPY is currently trading on the weak side of its pivot at 113.744, making it resistance.

The short-term range is 115.519 to 112.538. Its retracement zone at 114.029 to 114.380 is resistance. This zone stopped the selling at 114.262 on Wednesday.

The main range is 110.826 to 115.519. Its retracement zone at 113.173 to 112.619 is potential support. This area is also controlling the longer-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Friday is likely to be determined by trader reaction to 113.744.

Bearish Scenario

A sustained move under 113.744 will indicate the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the minor bottom at 113.225, followed by the main 50% level at 113.173.

A trade through 113.173 will indicate the selling is getting stronger with 112.619 – 112.538 the next potential target.

Bullish Scenario

A sustained move over 113.744 will signal the presence of buyers. This could lead to a labored rally with the nearest upside targets a short-term 50% level at 114.029, a main top at 114.262 and a Fibonacci level at 114.380. The latter is a potential trigger point for an acceleration to the upside.