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Dollar Remains in Control of the Japanese Yen


The dollar remains in bullish over the Japanese yen. Since the benchmark USD/JPY currency exchange rate opened at 109.22 yen on 22 September, the greenback has climbed 4.68 percent. Last week, this Forex marked another weekly gain of 1.8 percent.

Several U.S. Federal Reserve members will give commentary on Monday. Forex traders are looking for guidance on when the Federal Reserve could begin tapering in November. The U.S. central bank could reduce bond buys by the middle of November ending the program by mid-2022.

Japan will publish their monthly producer price index (PPI) and monthly machine tool orders. China will release their quarterly gross domestic product and monthly retail sales figures.

The rest of the economic calendar is quiet. The United Kingdom, euro area and United States have no economic data scheduled for release on Monday.

This will likely cause some price drifting for the dollar due to the lack of economic data. Headlines surrounding Taiwan will also likely play role in price volatility on Monday.

Daily Dollar Technical Analysis (USD/JPY)    

Looking at the above daily MT 4 price chart, the momentum indicators continue to rise higher. The 14 day MACD histogram is at its highest level since April and the 14 day relative strength index (RSI) is signaling overbought.

The dollar seems to be well above its true trade range and near its highest price level since 9 November 2020. The USD/JPY Forex market is also well above the 21, 50, 100 and 200 daily moving averages. The short-term 21 day simple moving average lines up around 111.50 yen.

The 50 and 100 daily moving averages are below 111 yen and the 200 simple moving average is below 109 yen.  With that said technical resistance lines up at 114.50 yen with the next upside level in play at 114.75.

The next layer of technical resistance is at 115.30 yen. On the downside, support for the dollar lines up at 113.70 yen with 112.22 yen coming into focus next. The next layer of support lines up at 111.55 yen.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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