USD/JPY Forex Technical Analysis – Closing Price Reversal Top Confirmed with 112.760 Next
A choppy performance by U.S. Treasury yields and a mixed performance in the U.S. stock market helped drive the Dollar/Yen lower on Thursday. Technical factors also played a role in the Forex pair’s weak performance.
On Wednesday, the Dollar/Yen posted a closing price reversal top after the 12 day rally stopped short of the November 6, 2017 main top at 114.728. This chart pattern was confirmed on Thursday when sellers took out 114.082, shifting momentum to the downside, but not signaling a change in trend.
On Thursday, the USD/JPY settled at 114.017, down 0.319 or -0.28%.
A mixed performance in the U.S. stock market helped fuel some safe-haven buying into the Japanese Yen. The benchmark S&P 500 boasted a record closing high and its seventh straight session of gains on Thursday while the NASDAQ Composite recovered from an early setback. However, a tumble in IBM shares weighed on the Dow.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart, however, momentum shifted to the downside with the confirmation of Wednesday’s closing price reversal top.
A trade through 114.694 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 110.826.
The short-term range is 110.826 to 114.694. Its 50% level at 112.760 is the next downside target. Since the main trend is up, buyers are likely to come in on a test of this level.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY early Friday is likely to be determined by trader reaction to 114.172.
A sustained move under 114.172 will indicate the presence of sellers. Taking out 113.650 will indicate the selling pressure is getting stronger. If this move creates enough downside momentum then look for the selling to possibly extend into the 50% level at 112.760 over the near-term.
A sustained move over 114.172 will signal the presence of buyers. If this generates enough upside momentum then look for buyers to make a run at 114.694 to 114.728.
Taking out 114.728 will be a sign of strength and could trigger an acceleration to the upside with 115.501 and 115.615 the next targets.