USD/JPY Forex Technical Analysis – Momentum Shifts to Upside on Trade Through 103.443

The Dollar/Yen is trading slightly higher early Thursday after posting a potentially bullish closing price reversal bottom the previous session. The chart pattern suggests the buying may be starting to become greater-than-the-selling at current price levels.

The rebound in the dollar against the Japanese Yen is likely being fueled by the jump in the 10-year Treasury yield above 1% for the first time since the pandemic-triggered rout in March. This widened the spread between U.S. Government bonds and Japanese Government bonds, making the U.S. Dollar a more attractive asset.

At 03:16 GMT, the USD/JPY is trading 103.155, up 0.083 or +0.08%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. However, momentum may be getting ready to shift to the upside with the formation of the closing price reversal bottom.

A trade through 103.443 will confirm the closing price reversal bottom. This could trigger the start of a 2 to 3 day counter-trend rally.

A trade through 102.593 will negate the closing price reversal bottom and signal a resumption of the downtrend.

A move through 103.899 will change the main trend to up.

The minor range is 103.899 to 102.593. Its 50% level at 103.246 is currently being tested. Crossing to the strong side of this level could create an upside bias.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY on Thursday is likely to be determined by trader reaction to the 50% level at 103.246.

Bearish Scenario

A sustained move under 103.246 will indicate the presence of sellers. If this generates enough downside momentum then look for the selling to possibly extend into the closing price reversal bottom at 102.593. Taking out this level will put the USD/JPY back on track for its near-term targets at 101.185 and 101.179.

Bullish Scenario

Overcoming and sustaining a move over 103.246 will signal the presence of buyers. Taking out 103.443 will confirm the closing price reversal bottom. This could trigger the start of a 2 to 3 day rally with the next targets a main top at 103.899 and a short-term retracement zone at 104.135 to 104.499.

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