USD/JPY Forex Technical Analysis – Choppy Trade; Strengthens Over 109.957, Weakens Under 109.569
The Dollar/Yen is under pressure early Tuesday despite a slight rise in U.S. Treasury yields. The price action in the Forex pair has been choppy the last couple of days since the release of Friday’s disappointing U.S. Non-Farm Payrolls report. Some traders are blaming the strength in the Japanese Yen on worries about a weakening global economy.
At 03:14 GMT, the USD/JPY is trading 109.773, down 0.083 or -0.08%.
In economic news, Japan’s household spending grew less than expected in July as a resurgence in COVID-19 cases hindered consumer activity, throwing broader economic recovery prospects into doubt.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 109.590 will change the main trend to down. A move through 110.420 will signal a resumption of the uptrend.
On the downside, the next downside target and potential support zone is 109.569 to 109.076.
On the upside, the first resistance is a minor pivot at 109.957, followed by a short-term retracement zone at 110.185 to 110.531.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to the minor pivot at 109.957.
Bearish Scenario
A sustained move under 109.957 will indicate the presence of sellers. The first downside target is the support cluster at 109.590 to 109.569. Look for a technical bounce on the first test of this area.
The USD/JPY should continue to weaken on a sustained move under 109.569. The first downside target is the minor bottom at 109.414. This price is a potential trigger point for an acceleration into another support cluster at 109.114 to 109.076.
Bullish Scenario
A sustained move over 109.957 will signal the presence of buyers. The next move should lead to a labored rally with potential upside targets lined up at 110.185, 110.420 and 110.531.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
