The Dollar/Yen is trading lower late in the session on Friday after hitting multi-month high earlier in the day. The two-sided price action reflects renewed uncertainty of a U.S.-China trade deal, and thin post-holiday trading conditions.
Going into the session, traders were growing a little uncertain that “Phase One” of the trade deal wouldn’t be reached ahead of the new U.S. tariffs on China on December 15. The lack of concrete news this week also contributed to the worries.
However, the biggest fear for investors is whether China will retaliate against the United States in response to President Trump’s signing into law congressional legislation which supported the pro-democracy protesters in Hong Kong. China warned the U.S. on Thursday it would take “firm countermeasures” in response to U.S. law backing the anti-government protesters.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At 20:27 GMT, the USD/JPY is trading 109.461, down 0.050 or -0.05%.” data-reactid=”14″>At 20:27 GMT, the USD/JPY is trading 109.461, down 0.050 or -0.05%.
Daily Technical Analysis
The main trend is up according to the daily swing chart. A trade through 109.669 will signal a resumption of the uptrend.
The main trend will change to down on a move through 108.280. This is highly unlikely on Friday, but the higher-high, lower-close has put the USD/JPY in a position to post a potentially bearish closing price reversal top.
A close below 109.511 will form a closing price reversal top. This won’t change the main trend to down, but it will indicate the selling is greater than the buying at current price levels.
If formed on Friday and confirmed on Monday, we could see the start of a 2 to 3 day correction.
The first downside target is a pair of uptrending Gann angles at 109.048 to 109.030. If this area fails as support then look for the selling to possibly extend into another pair of uptrending Gann angles at 108.775 and 108.655.
Closing higher will reset the USD/JPY for another surge to the upside with the first target angle coming in at 109.780. Crossing to the strong side of this angle will put the Forex pair in an extremely bullish position.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article was originally posted on FX Empire” data-reactid=”34″>This article was originally posted on FX Empire
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