USD/JPY Forex Technical Analysis – Taking Out 109.362 Confirms Uptrend with 109.849 Next Target

The Dollar/Yen is trading higher on Friday, just under the multi-month high reached on March 15. The greenback is being supported by a wave of optimism over improving U.S. economic data, the rollout of coronavirus vaccines, and rising Treasury yields.

At 06:21 GMT, the USD/JPY is trading 109.256, up 0.064 or +0.06%.

U.S. jobless claims fell to a one-year low last week and President Joe Biden said he will double his vaccination rollout plan after reaching his previous goal of 100 million shots 42 days ahead of schedule, both of which support optimism in the dollar.

Traders will look to data on U.S. personal consumption due later on Friday for further hints about the strength of the U.S. economy.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 109.362 will signal a resumption of the uptrend. The main trend will change to down on a move through 108.407.

The minor range is 109.233 to 108.340. The USD/JPY is currently trading on the strong side of its pivot at 108.851.

The retracement zone controlling the near-term direction of the Dollar/Yen is 108.230 to 107.154. This area is also support.

Daily Swing Chart Technical Forecast

Trader reaction to the pivot at 108.851 determines today’s direction.

Bullish Scenario

Look for the upside bias to continue as long as the USD/JPY holds above the pivot at 108.851. If this is able to generate enough upside momentum then look for a rally into 109.362. Taking out this level could trigger a further rally into the June 5, 2020 main top at 109.849. This is a potential trigger point for an acceleration to the upside with 111.715 a potential near-term upside target.

Bearish Scenario

A sustained move under 108.851 will be a sign of weakness. If this generates enough downside momentum then look for the selling to possibly extend into 108.407, followed by 108.340 and 108.230.

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