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USD/JPY Forex Technical Analysis – 102.886 is Trigger Point for Acceleration to Downside

James Hyerczyk
·2 min read

The Dollar/Yen posted a marginal gain on Thursday as investors squared positions ahead of the long-holiday weekend. Trading was thin with many investors out between the Christmas and New Year holidays. The Forex pair also held just above its nine-month low at 102.886, hit earlier in the month on December 17.

On Thursday, the USD/JPY settled at 103.305, up 0.090 or +0.09%.

The Dollar/Yen was supported as U.S. Senate leader Mitch McConnell dealt a likely death blow on Wednesday to President Donald Trump’s bid to boost coronavirus aid to Americans, declining to schedule a swift Senate vote on a bill to raise relief checks to $2,000 from $600.

In other news, data on Thursday showed that the number of Americans filing first-time claims for unemployment benefits unexpectedly fell last week but remained elevated more than nine months.

Daily USD/JPY
Daily USD/JPY

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 102.886 will signal a resumption of the downtrend. The main trend will change to up on a move through 104.751.

The minor trend is also down. A trade through 103.899 will change the minor trend to up. This will shift momentum to the upside.

The minor range is 102.886 to 103.899. Its 50% level at 103.393 is controlling the near-term direction of the Dollar/Yen. The close under this level makes it resistance.

The short-term range is 105.677 to 102.886. If the minor trend changes to up then its retracement zone at 104.282 to 104.611 will become the primary upside target.

Short-Term Outlook

Despite the sharp break on Wednesday, buyers came in to defend the 102.886 main bottom. This was likely a function of the thin holiday volume. Under normal trading conditions, sellers would’ve taken out 102.886 and triggered an acceleration into a pair of main bottoms at 101.185 and 101.179 over the near-term.

Overcoming 103.393 will indicate the presence of buyers. If this move creates enough upside momentum then look for the rally to possibly extend into the minor top at 103.899.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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