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USD/JPY Forex Technical Analysis – 108.226 Potential Trigger Point for Acceleration into 110.226

James Hyerczyk

The U.S. Dollar soared against the Japanese Yen on Friday as stock markets recovered globally and investors cheered efforts by governments and policymakers to address the economic fallout from the coronavirus outbreak. Additionally, the greenback posted its largest daily percentage gain against the Yen since April 2013.

The dollar also jumped after President Donald Trump declared a U.S. national emergency over the quickly spreading coronavirus on Friday, opening the door to more federal aid to combat the disease.

On Friday, the USD/JPY settled at 108.019, up 3.354 or +3.20%.

The USD/JPY also spiked higher after the Federal Reserve stepped up its stimulus measures to counter signs of market dysfunction in the face of the spreading coronavirus. Yields edged higher following the Federal Reserve’s announcement of its bond-buying program as part of its efforts to help the financial system through the coronavirus scare.


Daily 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 112.226. A trade through 101.185 will signal a resumption of the downtrend.

The minor trend is up. It turned up on Friday when buyers took out the last minor top at 105.919. It was reaffirmed on a trade through 107.742. Both moves led to a change in momentum.

The main range is 112.226 to 101.185. Its retracement zone at 106.706 to 108.008 was the primary upside target. The Forex pair closed slightly above this zone, giving the buyers a slight edge for a higher opening on Monday.

Short-Term Outlook

Based on Friday’s close at 108.019, the direction of the USD/JPY on Monday is likely to be determined by trader reaction to the Fibonacci level at 108.008.

Bullish Outlook

A sustained move over 108.008 will indicate the presence of buyers. Taking out the downtrending Gann angle at 108.226 could trigger an acceleration to the upside with the next target angle coming in at 110.226.

Bearish Outlook

A sustained move under 108.008 will signal the presence of sellers. The first downside target is the 50% level at 106.706. If this fails then look for the selling to possibly extend into the first uptrending Gann angle at 105.185. This angle provided support on Friday.

If 105.185 fails then look for the selling to continue into the next uptrending Gann angle at 103.185.

Side Notes

The close near the high makes me think we could see a gap ‘n’ go opening on Monday.

This article was originally posted on FX Empire