USD/JPY Forex Technical Analysis – Trading on Bearish Side of Short-Term Pivot at 103.393
The Dollar/Yen is trading lower early Wednesday on renewed selling pressure and end-of-the month position-squaring as the prospect of additional U.S. stimulus bolstered the Yen’s appeal as an investment and tarnished the greenback’s allure as a safe-haven asset. The move took place as Washington lawmakers prepared to address President Donald Trump’s request for larger coronavirus checks this week.
At 06:45 GMT, the USD/JPY is trading 103.339, down 0.195 or -0.19%.
Meanwhile, if the new stimulus measure isn’t passed at this time, investors are still looking forward to a much stronger wave of stimulus after President-elect Joe Biden takes office on January 20.
Daily Swing Chart Technical Analysis
The main trend is down according to the daily swing chart. A trade through 104.751 will change the main trend to up, while a move through 102.886 will signal a resumption of the downtrend.
The minor trend is also down. A new minor top has formed at 103.899.
The minor range is 102.886 to 103.899. The USD/JPY broke below its pivot at 103.393 earlier in the session, turning it into possible resistance.
The main range is 105.677 to 102.886. If the minor trend changes to up then its retracement zone at 104.282 to 104.611 will become the next key upside target zone.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY the rest of the session on Wednesday is likely to be determined by trader reaction to 103.393.
A sustained move under 103.393 will indicate the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the main bottom at 102.886 over the near-term.
Overtaking and sustaining a move over 103.393 will signal the presence of buyers. If this move can generate enough upside momentum then look for a possible retest of 103.899.
The formula for a steep plunge on Wednesday will be the extremely light volume and the passing of a bill to give Americans additional fiscal stimulus. This issue should be the focus for traders throughout the session.
For a look at all of today’s economic events, check out our economic calendar.