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USD/JPY Forex Technical Analysis – Uptrend Resumes After Treasury Yields Jump

By:
James Hyerczyk
Published: Feb 28, 2019, 21:09 UTC

Based on the current price at 111.453, the direction of the USD/JPY on Friday is likely to be determined by trader reaction to the previous main top at 111.235.

USD/JPY Forex Technical Analysis – Uptrend Resumes After Treasury Yields Jump

The Dollar/Yen rose sharply to its highest level since December 20 on Thursday on the back of a stronger than expected U.S. growth report. Traders overcame earlier safe-haven buying that drove the Forex pair lower. The early selling pressure was fueled by renewed tensions over U.S.-China trade negotiations and the abrupt ending of the U.S.-North Korean nuclear discussions that finished without an agreement.

At 20:50 GMT, the USD/JPY is trading 111.453, up 0.459 or +0.41%.

The surge to the upside was triggered by a better-than-expected U.S. GDP report. This news raised the odds of a Fed rate hike later in the year, fueling a steep rise in U.S. Treasury yields. This made the U.S. Dollar a more attractive investment.

USDJPY
Daily USDJPY

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed when buyers took out the previous main top at 111.235. The new main bottom is 110.350. A trade through this level will change the main trend to down.

The main range is 113.710 to 105.180. Its retracement zone at 110.452 to 109.445 is controlling the near-term direction of the USD/JPY. Trading above this zone is helping to give the Forex pair a strong upside bias.

Daily Swing Chart Technical Forecast

Based on the current price at 111.453, the direction of the USD/JPY on Friday is likely to be determined by trader reaction to the previous main top at 111.235.

Bullish Scenario

A sustained move over 111.235 will indicate the presence of buyers. This will serve as further proof that the buying is real and not just being fueled by short-covering and buy stops. The buying was also strong enough to take out the December 26 main top at 111.430. This is further confirmation of the presence of strong buyers. The major upside targets are 113.710 and 114.580.

Bearish Scenario

The inability to sustain a move over 111.235 will signal the return of sellers. If this selling is strong enough then look for the selling to possibly extend into the major Fibonacci level at 110.452, followed by the main bottom at 110.350.

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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