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James Hyerczyk
USD/JPY

The Dollar/Yen is trading slightly lower early Wednesday and inside yesterday’s range. On Tuesday, the Forex pair was supported as U.S. Treasury yields climbed to a one-week high as investors adjusted portfolios to reported progress in U.S.-China trade negotiations.

U.S. Trade Representative Robert Lighthizer and senior U.S. officials will travel to Shanghai on Monday for face-to-face trade meetings with Chinese officials, Bloomberg reported on Tuesday, citing unnamed sources.

At 03:42 GMT, the USD/JPY is trading 108.178, down 0.0045 or -0.04%.

The U.S. Dollar was also lifted after the Trump administration on Tuesday reached a deal with lawmakers to lift government borrowing limits. Analysts said that the move would increase U.S. borrowing, which would tighten the supply of money in the country’s banking system. This would be supportive for the greenback.

Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 108.991 will change the main trend to up. A move through 107.212 will signal a resumption of the downtrend.

The minor trend is also down. A trade through 108.375 will change the minor trend to up. This will also shift momentum to the upside.

The intermediate range is 106.775 to 108.991. Its retracement zone at 107.883 to 107.622 is support.

The short-term range is 108.991 to 107.212. Its retracement zone at 108.102 to 108.311 is resistance. This zone is currently being tested.

The main range is 110.677 to 106.775. Its retracement zone at 108.726 to 109.186 is the next target area. This zone stopped a rally at 108.991 on July 10.

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Daily Swing Chart Technical Forecast

Based on today’s early price action and yesterday’s high, the direction of the USD/JPY on Wednesday is likely to be determined by trader reaction to the short-term Fibonacci level at 108.311.

Bullish Scenario

A sustained move over 108.311 will indicate the presence of buyers. This could lead to a test of the minor top at 108.375. Taking out this top will change the minor trend to up. This could create the upside momentum needed to trigger an acceleration into the main 50% level at 108.726.

Bearish Scenario

A sustained move under 108.311 will signal the presence of sellers. This could trigger a labored break with potential targets the short-term 50% level at 108.102, followed by the intermediate 50% level at 107.883. If this level fails then look for the selling to possibly extend into the intermediate Fibonacci level at 107.622.

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