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USD/JPY Forex Technical Analysis – Taking Out Last Week’s High at 112.730 Could Trigger Rally into 113.101 to 113.450

By:
James Hyerczyk
Published: Oct 22, 2018, 05:19 UTC

Based on last week’s trade and close at 112.534, the direction of the USD/JPY this week is likely to be determined by trader reaction to the 50% level at 112.175.

USD/JPY

The Dollar/Yen is trading higher early Monday on the back of a more than 4 percent surge in China stocks. This is helping to drive up demand for higher risk assets, making the Japanese Yen a less-desirable safe-haven asset. The Dollar/Yen is likely to continue to rally this week as long as stocks continue to claw back recent losses. The Forex pair could get an additional boost if there is a rise in U.S. Treasury yields this week.

At 0504 GMT, the USD/JPY is trading 112.608, up 0.074 or +0.07%.

USDJPY
Weekly USD/JPY

Weekly Swing Chart Technical Analysis

The main trend is up according to the weekly swing chart. A trade through 109.770 will change the main trend to down. A move through 114.580 will signal a resumption of the uptrend.

The minor trend is also up. A trade through 110.379 will change the minor trend to down. This will also shift momentum to the downside.

The main range is 108.114 to 114.580. Its retracement zone at 111.347 to 110.584 is the primary downside target and new support.

The intermediate range is 109.770 to 114.580. Its retracement zone at 112.175 to 111.607 is support. This zone stopped the selling last week at 111.622.

The short-term range is 114.580 to 111.622. Its retracement zone at 113.101 to 113.450 is the primary upside target.

Weekly Swing Chart Technical Forecast

Based on last week’s trade and close at 112.534, the direction of the USD/JPY this week is likely to be determined by trader reaction to the 50% level at 112.175.

A sustained move over 112.175 will indicate the presence of buyers. If this creates enough upside momentum then look for a rally into at least 113.101 to 113.450.

A sustained move under 112.175 will signal the presence of sellers. The first downside target is the Fib at 111.607, followed by the main 50% level at 111.347.

Look for a potential acceleration to the downside if 111.347 is taken out with conviction. If the selling is strong enough then we could see a test of the main Fib at 110.584.

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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