USD/JPY Forex Technical Analysis – Trigger Point for Acceleration to Downside is Short-Term Pivot at 110.212

The Dollar/Yen is trading lower early Thursday amid another drop in U.S. Treasury yields and further weakness in the global equity markets. Traders are reacting to lower shares in Asia on Thursday, which are falling in reaction to weakness on Wall Street and the drop in the 10-year U.S. Treasury yield to its lowest level in more than a year.

At 00:56 GMT, the USD/JPY is trading 110.308, down 0.202 or -0.18%.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 109.710 will signal a resumption of the downtrend.

The minor trend is also down. Yesterday’s high at 110.713 could become a new minor top if sellers take out 110.230.

The major long-term retracement zone is 110.452 to 109.445. The Forex pair has been trading inside this zone five sessions. It is controlling the longer-term direction of the USD/JPY.

The main range is 108.495 to 112.137. The USD/JPY is also testing its retracement zone at 110.316 to 109.887. This zone falls inside the major longer-term retracement zone. Buyers are trying to form a support base inside this zone.

The intermediate range is 111.940 to 109.710. Its retracement zone at 110.825 to 111.088 is the primary upside target. This zone is currently resistance.

The short-term range is 109.710 to 110.713. Its 50% level or pivot at 110.212 is acting like support. This price level is controlling the short-term direction of the Forex pair.

Daily Swing Chart Technical Forecast

Based on the early price action, the direction of the USD/JPY is likely to be determined by trader reaction to the major Fibonacci level at 110.452 and the main 50% level at 110.316.

Bullish Scenario

Holding 110.316 will be the first sign of buyers. Taking out 110.452 could trigger an acceleration to the upside with the initial target 110.713 and the intermediate retracement zone at 110.825 to 111.088.

Bearish Scenario

Holding below 110.452 will indicate the presence of sellers. Crossing to the weak side of 110.316 will indicate the selling is getting stronger. The trigger point for an acceleration to the downside is 110.212.

Taking out the pivot at 110.212 could trigger a steep break into the main Fibonacci level at 109.887. This is followed by last Friday’s low at 109.710 and the major 50% level at 109.445.