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  • USD / JPY Forex Technical Analysis – Expected volatility with tone bullish above 115.820, bearish below 115.509

USD / JPY Forex Technical Analysis – Expected volatility with tone bullish above 115.820, bearish below 115.509

By on January 7, 2022 0

The dollar / yen is trading flat on Friday ahead of today’s report on non-farm wages in the United States, which is due for release at 13:30 GMT. Earlier in the week, the greenback hit a five-year high against the Japanese yen on Tuesday, the day before Federal Reserve meeting minutes indicating policymakers were preparing to tighten monetary policy more aggressively. .

At 10:10 am GMT, USD / JPY is trading at 115.831, down 0.026 or -0.02%. On Thursday, the Invesco CurrencyShares Japanese Yen Trust (FXY) ETF stood at $ 80.95, up $ 0.12 or + 0.15%.

The December non-farm wage report is due for release at 1:30 p.m. GMT on Friday. Economists expect the economy to have created 422,000 jobs in December, according to estimates compiled by Dow Jones. The unemployment rate is expected to stand at 4.1%.

A higher than expected non-farm payrolls number should be bullish for the USD / JPY as it will consolidate the chances of an interest rate hike in March by the Federal Reserve. However, some traders say that Dollar / Yen traders have already taken this news into account. This could lead to limited reaction or even encourage profit taking.

Daily USD / JPY

Technical analysis of the daily swing chart

The main trend is upward on the daily swing chart. A trade through 116.345 will signal a resumption of the uptrend. Pulling out 113,148 will change the main downtrend. This is highly unlikely, but due to the prolonged rise in price and time, we may see the formation of a potentially bearish closing reversal top.

The minor trend is also up. A trade down to 114.672 will change the minor downtrend. This will shift the momentum downward.

The first minor range is from 114.672 to 116.345. His level of 50% at 115.509 is support.

The second minor range is 113.148 to 116.345. Its 50% level at 114.747 is another potential target on the downside.

The short-term range is 112.538 to 116.345. If the minor trend changes lower, look for a possible extension of the short in its retracement area at 114.442 to 113.992.

Technical forecasts of the daily swing chart

The direction of the USD / JPY on Friday will likely be determined by the reaction of traders at 115,820.

Bullish scenario

A sustained move above 115.820 will indicate the presence of buyers. If this move creates enough bullish momentum, look for a push towards 116.345. Exiting this level could trigger an upward acceleration.

Bearish scenario

A sustained move below 115.820 will signal the presence of sellers. The first target down is 115.509. We might see a technical rebound on the first test of this level, but if it fails, look for the start of a strong breakout towards 114.747.