The dollar / yen rose on Tuesday after rebounding from initial weakness after data showed producer prices rose more than expected as supply constraints persisted. The data showed the largest annual gain in at least 11 years. The news pushed US Treasury yields higher, ahead of the Federal Reserve’s policy meeting in December, making the US dollar a more attractive investment.
At 9:42 p.m. GMT, USD / JPY is trading at 113.743, up 0.161 or + 0.14%. The Invesco CurrencyShares Japanese Yen Trust (FXY) is at $ 82.54, down $ 0.07 or -0.09%.
Data from the Ministry of Labor showed that the producer price index (PPI) for final demand in the 12 months to November rose 9.6%, registering its largest increase since November 2010 and followed an 8.8% increase in October.
The Fed launched its last monetary policy meeting on Tuesday, during which it is expected to discuss accelerating the reduction in its bond buying program. The meeting will end on Wednesday afternoon and will be followed by a press conference with Fed Chairman Jerome Powell.
Technical analysis of the daily swing chart
The main trend is downward according to the daily swing chart. However, the trend is on the rise.
A trade at 112.538 will signal a resumption of the downtrend. A move through 115.519 will change the main trend upward.
The minor trend is upward. It’s controlling momentum. A trade through the minor high at 113.950 will indicate the buy is strengthening. A move through 113.225 will indicate that selling pressure is building.
The minor range is 113.950 to 113.225. The USD / JPY is currently trading on the strong side of its pivot at 113.588, making it support.
The short-term range is 115.519 to 112.538. Its retracement area at 114.029 to 114.380 is the main bullish target and the area of ââpotential resistance.
The main range is 110.826 to 115.519. His retracement zone at 113.173 to 112.619 is support. This area controls the short-term direction of the USD / JPY.
Technical forecasts of the daily swing chart
The direction of the USD / JPY early Wednesday will likely be determined by the reaction of traders at 113.588.
A sustained move above 113.588 will indicate the presence of buyers. The first bullish target is 113.950. Exiting this level could trigger a further rally from 114.029 to 114.380.
The breakthrough of 114.380 could trigger an upward acceleration with 115.519 as the next major target.
A sustained move below 113.588 will signal the presence of sellers. The first bearish target is 113.225, followed closely by 113.173.
If 113,173 fails as support, look for potential downward acceleration with 112,619 as the first target, followed by 112,538.