The Dollar/Yen is edging higher on Wednesday as fresh rises in coronavirus cases kept investors on edge and the greenback funding market tight. The price action suggests investors are downplaying the huge $2 trillion stimulus package passed by the U.S. Senate earlier today.
Additionally, the U.S. Federal Reserve’s offer of unlimited bond-buying, on top of opening discount dollar funding lines to central banks around the globe, has supported risk sentiment and the U.S. Dollar for the past few days.
However, nerves and still-elevated demand for greenbacks in cash is helping to keep the pressure on the Japanese Yen despite the impressive price action in the global equity markets this week.
Furthermore, Bank of Japan (BOJ) and government officials are secretly applauding the weaker Japanese Yen and are not feeling pressure to support it as they try to navigate through the damage being fueled by the impact of the coronavirus.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="At 08:26 GMT, the USD/JPY is trading 111.516, up 0.271 or +0.24%.” data-reactid=”16″>At 08:26 GMT, the USD/JPY is trading 111.516, up 0.271 or +0.24%.
Daily Technical Analysis
The main trend is down according to the daily swing chart, however, momentum is trending higher. A trade through 112.226 will change the main trend to up. A move through 101.185 will signal a resumption of the downtrend.
The minor trend is up. This is controlling the momentum.
The USD/JPY is currently in a position to challenge this year’s high at 112.226 and the April 24, 2019 main top at 112.405. Trader reaction to these levels will likely set the longer-term tone.
The main range is 112.226 to 101.185. Its retracement zone at 108.008 to 106.706 is support. This zone has to hold or the market could collapse.
Daily Technical Forecast
Based on the early price action, the direction of the USD/JPY the rest of the session on Wednesday is likely to be determined by trader reaction to a pair of uptrending Gann angles at 110.726 and 111.476.
A sustained move over 111.476 will indicate the presence of buyers. This could trigger a surge into 112.226 and 112.405. Overtaking the latter could trigger an acceleration to the upside with the December 13, 2018 main top at 113.710 the next major upside target.
A sustained move under 111.476 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the next downtrending Gann angle at 109.226. This is a potential trigger point for an acceleration into the main Fibonacci level at 108.008.
<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=”39″>This article was originally posted on FX Empire
More From FXEMPIRE:
- NZD/USD Forex Technical Analysis – Counter-Trend Buyers Targeting .5959 – .5968
- USD/JPY Forex Technical Analysis – Strengthens Over 111.476, Weakens Under 110.726
- Crude Oil Price Update – Trader Reaction to $24.50 Will Set the Tone on Wednesday
- US Stocks Struggle Early after Tuesday’s Overcooked Rally
- AUD/USD Forex Technical Analysis – Big Test for Counter-Trend Buyers at .6098 to .6236
- The Crypto Daily – Movers and Shakers -25/03/20