USD / JPY Forex Technical Analysis – Hovering Just Below Multi-Year Resistance at 112.226 and 112.405
The dollar / yen is moving lower early on Thursday, with the Forex pair hovering just below the highs last seen in February 2020 and April 2019. According to some technical measures, the dollar / yen is overbought, but this valuation does not It doesn’t make sense since we are in a fundamentally rally driven situation. Also, by my calculations there are a lot of US dollars so I don’t think it can ever be overbought.
However, if you mean that investors are reluctant to buy dollars or that there are more sellers than buyers at current price points, then that’s another story. Don’t believe the oscillator, watch the price action and order flow for direction.
At 5:25 am GMT, USD / JPY is trading at 111.915, down 0.067 or -0.06%.
The dollar / yen is hovering near a multi-year high amid expectations of a decline in Federal Reserve stimulus from November and a possible interest rate hike at the end of 2022.
Investors are also worried about a period of slowing global growth and a possible shutdown of the US government. If these factors become a major concern, the USD / JPY could weaken if the news pushes investors towards the safe haven of the Japanese yen.
Technical analysis of the daily swing chart
The main trend is upward on the daily swing chart. A trade up to 112.049 will signal a resumption of the uptrend. Breaking out of the pair of major highs at 112.226 and 112.405 will reaffirm the bullish trend.
A trade up to 109,122 will change the main downtrend. This is highly unlikely, but due to the prolonged rise in price and time, today’s session starts with the USD / JPY in the time window for a closing price reversal top. .
The minor range is 109.122 to 112.049. His retracement zone at 110.581 to 110.235 is the closest support zone.
Technical forecasts of the daily swing chart
The direction of the USD / JPY on Thursday will be determined by the reaction of traders at 111,982.
A sustained move above 111.982 will indicate the presence of buyers. Removing 112.049 will indicate that the purchase is getting stronger. This could trigger a push towards a pair of major highs at 112.226 and 112.405.
Watch for sellers on the first test of 112.226 – 112.405. However, 112.405 is also a trigger point for upward acceleration.
The daily chart indicates that there is a lot of room to the upside with the nearest resistance, the main high on December 13, 2018 at 113.710.
A sustained move below 111.982 will signal the presence of sellers. If this move creates sufficient bearish momentum, look for the start of a short term correction from 110.581 to 110.235.
Top Formation Inversion closing price
Exiting 112.049 and then closing below 111.982 will form a potentially bearish closing reversal top. This will not change the downtrend, but if confirmed it could trigger the start of a 2-3 day correction with 110.581 to 110.235 the most likely target area.