USD/JPY Forex Technical Analysis – Trader Reaction to 111.452 Could
The Dollar/Yen is trading higher early Tuesday as prices firm following a three-day setback. The price action suggests traders are beginning to position themselves ahead of Friday’s U.S. Non-Farm Payrolls report that could offer clues on the timing of a tapering of Federal Reserve stimulus and the start of interest rate hikes.
At 04:57 GMT, the USD/JPY is trading 111.198, up 0.278 or +0.25%.
Friday’s nonfarm payrolls data is expected to show continued improvement in the labor market, with a forecast for 488,000 jobs to have been added in September, according to a Reuters poll – enough to keep the Fed on course to begin tapering before year’s end.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum has been trending lower since the formation of the closing price reversal top on September 30.
A trade through 112.078 will negate the closing price reversal top and signal a resumption of the uptrend. The main trend will change to down on a trade through 109.122.
The short-term range is 109.113 to 112.078. Its retracement zone at 110.596 to 110.246 is potential support. Monday’s low stopped just above this zone at 110.826.
The minor range is 112.078 to 110.826. Its 50% level or pivot at 111.452 is the nearest upside target and potential resistance.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to 111.063.
Bullish Scenario
A sustained move over 111.063 will indicate the presence of buyers. If this move creates enough upside momentum then look for a test of 111.452. Counter-trend sellers could come in on a test of this level. They are going to try to form a secondary lower top.
Overtaking 111.452 will indicate the buying is getting stronger. This could trigger a surge into 112.078.
Bearish Scenario
A sustained move under 111.063 will signal the presence of sellers. If this move generates enough downside momentum then look for the selling to possibly extend into the short-term retracement zone at 110.596 to 110.246.
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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