The dollar / yen is trading higher on Monday as traders bet US inflation data and appearances from several Federal Reserve officials would strengthen the case for a hike in interest rates. In addition, trade in the Asian session is weakened by vacations in Japan.
The dollar sold off late last week after a weaker than expected US job creation figure prompted traders to exit long dollar positions. But analysts said better-than-expected unemployment numbers still made a good case for hikes sooner rather than later.
At 08:17 GMT, USD / JPY is trading at 115.785, up 0.223 or + 0.19%. On Friday, the Invesco CurrencyShares Japanese Yen Trust (FXY) ETF stood at $ 81.22, up 0.25 or + 0.31%.
Federal Reserve Chairman Jerome Powell and Governor Lael Brainard testified before Senate committees this week about their appointments as chairman and deputy chairman of the Fed.
Inflation figures in the United States are due on Wednesday, with the headline CPI expected to climb to 7% year-on-year.
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. A move through 112.538 will change the main trend down.
The minor trend is also up. A trade down to 114.672 will change the minor downtrend. It will also change the momentum.
The minor range is 114.672 to 116.345. Its 50% or pivot level at 115.509 is support.
The second minor range is 113.148 to 116.345. Its 50% level at 114.747 is the next support level.
The short-term range is 112.538 to 116.345. If the minor trend goes down, its retracement area at 114.442 to 113.992 will become the main downside target and value area. This area should be attractive to longer term buyers.
Technical forecasts of the daily swing chart
The direction of the USD / JPY on Monday will likely be determined by the reaction of traders at 115.509.
A sustained move above 115.509 will indicate the presence of buyers. The first bullish target is 115.942. Exceeding this level will indicate that the buy is getting stronger with 116.345 the next target. Exceeding this level could trigger an acceleration to the upside as there is no major resistance up to over 118,000.
A sustained move below 115.509 will signal the presence of sellers. The daily chart indicates that there is plenty of room for a downside with 114.747 – 114.672 the next key downside area.