USD/JPY Forex Technical Analysis – Trend Changes to Up on Strong U.S. Economic Data

The Dollar/Yen is trading higher on Friday on the back of strong U.S. labor and inflation data that dampened concerns about the world’s largest economy possibly slipping into recession later in the year. The news strengthened U.S. Treasury yields which helped widen the spread between U.S. Government bond yields and Japanese government bond yields, making the U.S. Dollar a more attractive investment.

At 03:22 GMT, the USD/JPY is trading 111.734, up 0.072 or +0.06%.

Daily Technical Analysis

The main trend is up according to the daily swing chart. The trend turned up earlier in the session when buyers took out the previous main top at 111.823. The next upside targets are a pair of main tops at 111.940 and 112.137. On the downside, the new main bottom is 110.843. A trade through this bottom will change the main trend to down.

The short-term range is 111.940 to 109.710. Its retracement zone at 111.088 to 110.843 stopped the selling and provided support on Wednesday at 110.843.

The major support zone is 110.316 to 109.886.

Daily Technical Forecast

Today’s move is being driven by momentum. The upside momentum should continue to build if buyers can sustain a rally over 111.823. This is minor support under the saying, “old tops tend to become new bottoms”. If momentum continues to build then look for the rally to possibly extend into a pair of main tops at 111.940 and 112.137.

Overcoming 112.137 will indicate the buying is getting stronger. The daily chart also indicates that this is a potential trigger point for an acceleration to the upside with the next major target the December 13, 2018 main top at 113.710.

A failure to hold above 111.823 will not indicate a change in trend, but it will show that the selling is greater than the buying at current price levels. This could trigger a break back into an uptrending Gann angle at 111.343. Since the main trend is up, buyers are likely to come in on a test of this angle.

If 111.343 fails then look for the selling to possibly extend into a support cluster at 111.093 to 111.088.