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USD/JPY Forex Technical Analysis – Upside Momentum Could Drive Dollar/Yen into 111.940 – 112.137 Resistance

By:
James Hyerczyk
Published: Apr 6, 2019, 21:42 UTC

The current rally is being driven by momentum being fueled by rising yields and appetite for riskier assets. Dampened concerns over a U.S. recession later in the year, and optimism over a U.S.-China trade deal are generating support for the Dollar over the Yen. If the upside momentum continues on Monday, then look for buyers to make a run at the two main tops at 111.940 and 112.137.

USD/JPY

The Dollar/Yen closed higher on Friday on the back of higher U.S. Treasury yields and stronger appetite for risky assets. The spread between U.S. Government bond yields and Japanese Government bond yields widened, making the U.S. Dollar a more attractive asset. The catalyst behind the rally was a jump in U.S. headline payrolls, however, gains were limited by disappointing wage gains.

On Friday, the USD/JPY settled at 111.718, up 0.076 or +0.07%.

USDJPY
Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart, however, momentum is trending higher. The main trend will change to up on a trade through 111.940. The nearest main bottom is 109.710.

The USD/JPY is in no position to take out 109.710, but it is inside the window of time for a closing price reversal top. As of Monday’s opening, the market will be up 11 sessions from its last main bottom. This makes it ripe for the potentially bearish reversal top. This could lead to a 2 to 3 day counter-trend correction.

The minor trend is up. This is driving the momentum higher. A trade through 111.205 will change the minor trend to down. This will shift momentum to the downside.

The current main range is 111.940 to 109.710. Its retracement zone at 111.088 to 110.825 is the primary downside target and nearest support.

Daily Swing Chart Technical Forecast

The current rally is being driven by momentum being fueled by rising yields and appetite for riskier assets. Dampened concerns over a U.S. recession later in the year, and optimism over a U.S.-China trade deal are generating support for the Dollar over the Yen.

If the upside momentum continues on Monday, then look for buyers to make a run at the two main tops at 111.940 and 112.137.

The inability to follow-through to the upside will signal the buying is getting weaker, or the selling is getting stronger. Taking out Friday’s high at 111.823 then turning lower for the session will indicate traders are setting up the closing price reversal top. A higher-high, lower-close will form the chart pattern and a follow-through to the downside on Tuesday will confirm it. This could trigger the start of a 2 to 3 day correction.

About the Author

James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.

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