USD/JPY Forex Technical Analysis – Strengthens Over 109.761, Weakens Under 109.634

The Dollar/Yen is inching higher early Monday on relatively low volume as many of the major players may have already taken to the sidelines ahead of the Fed announcements on Wednesday.

The Fed’s two-day policy meeting will likely dominate investor behavior in the Dollar/Yen this week.  Although the central bank is not expected to take any action, its forecasts for interest rates, inflation and the economy could move the Dollar/Yen.

At 06:26 GMT, the USD/JPY is trading 109.720, up 0.033 or +0.03%.

In other news, the Bank of Japan is set to keep its money spigots wide open and may extend its pandemic-relief programs this week to support a fragile economic recovery, reinforcing expectations it will lag major counterparts in dialing back crisis-mode policies. The BOJ is set to make its monetary policy announcements late Thursday/early Friday.


Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 109.192 will signal a resumption of the downtrend. A move through 110.329 will change the main trend to up.

The minor trend is 110.329 to 109.192. Its 50% level at 109.761 is resistance.

On the downside, potential support is layered at 109.634, 109.445 and 109.223.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Monday is likely to be determined by trader reaction to the minor pivot at 109.761.

Bullish Scenario

A sustained move over 109.761 will indicate the presence of buyers. If this move is able to generate enough upside momentum then look for a short-term surge into 110.329.

Bearish Scenario

A sustained move under 109.761 will signal the presence of sellers. This could lead to the start of a labored break with potential downside targets lined up at 109.634, 109.445, 109.223 and the main bottom at 109.192. The latter is a potential trigger point for an acceleration into the short-term 50% level at 108.904.

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

Published by

James Hyerczyk

James A. Hyerczyk has worked as a fundamental and technical financial market analyst since 1982. His technical work features the pattern, price and time analysis techniques of W.D. Gann.