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The Dollar/Yen is inching higher early Monday after posting its worst daily loss in a month the previous session. The recent price action suggests investors have begun positioning themselves ahead of Tuesday’s U.S. consumer inflation report and perhaps the Federal Reserve’s interest rate and policy decision on September 21.
At 03:25 GMT, the USD/JPY is trading 142.870, up 0.311 or +0.22%. On Friday, the Invesco CurrencyShares Japanese Yen Trust ETF (FXY) settled at $65.49, up $0.55 or +0.85%.
On Tuesday, the U.S. Bureau of Labor Statistics will release the Consumer Price Index (CPI) report for the month of August. Whatever the upcoming CPI report says, it remains likely that the Fed will raise interest rates by 75 basis-points at its next meeting on September 20-21, but the data may inform the Fed’s medium-term thinking as we look to Fed meetings later this year and in early 2023.
Tuesday’s U.S. CPI report is expected to confirm inflation has peaked as falling gasoline prices are seen pulling down the headline index by 0.1%, according to a Reuters poll. The core index is forecast to rise 0.3%, though some analysts see a chance of a softer report.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. A trade through 144.991 will signal a resumption of the uptrend. A move through 131.734 will change the main trend to down. ‘
The minor trend is also up. A trade through 135.809 will change the minor trend to down. This will shift the momentum.
The first minor range is 144.991 to 141.507. Its pivot at 143.249 is the nearest resistance.
The second minor range is 135.809 to 144.991. Its pivot at 140.400 is the nearest support.
The short-term range is 130.412 to 144.991. Its 50% level at 137.702 is additional support. The major support zone is 135.677 to 133.478.
Daily Swing Chart Technical Forecast
Trader reaction to the minor pivot at 143.249 is likely to determine the direction of the USD/JPY early Monday.
Bearish Scenario
A sustained move under 143.249 will indicate the presence of sellers. Taking out Friday’s low at 141.507 will indicate the selling is getting stronger with 140.400 the next target. Although buyers are expected to come in on the first test of this level, it’s also the trigger point for an acceleration to the downside with 137.702 the next target.
Bullish Scenario
A sustained move over 143.249 will signal the presence of buyers. If this generates enough upside momentum then look for a surge into the 24-year high at 144.991. This is a potential trigger point for an acceleration to the upside.
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