The Dollar/Yen is inching higher early Tuesday on increased bets the U.S. Federal Reserve will announce the start of tapering of its massive bond-b
The Dollar/Yen is inching higher early Tuesday on increased bets the U.S. Federal Reserve will announce the start of tapering of its massive bond-buying at its November 2-3 monetary policy meeting.
The news is helping to drive U.S. Treasury yields sharply higher, which is widening the spread between U.S. Government bonds and Japanese Government bonds, making the U.S. Dollar a more attractive investment.
At 02:16 GMT, the USD/JPY is trading 113.359, up 0.032 or +0.03%.
Daily Swing Chart Technical Analysis
The main trend is up according to the daily swing chart. The uptrend was reaffirmed earlier today when buyers took out yesterday’s high at 113.411. A trade through the intraday high at 113.485 will indicate the buying is getting stronger.
Taking out the December 13, 2018 main top at 113.710 will reaffirm the uptrend.
On the downside, the nearest support is a minor 50% level at 112.156. The main trend will change to down on a trade through 110.826.
Daily Swing Chart Technical Forecast
The direction of the USD/JPY on Tuesday is likely to be determined by trader reaction to 113.326.
Bullish Scenario
A sustained move over 113.326 will indicate the presence of buyers. Taking out the intraday high at 113.485 could create the upside momentum needed to challenge the main top at 113.710.
Taking out 113.710 could trigger the start of a labored rally with potential upside targets the November 28, 2018 main top at 114.036 and the November 12, 2018 main top at 114.210. The latter is a potential trigger point for a surge into 114.580 to 114.728.
Bearish Scenario
A sustained move under 113.326 will signal the presence of sellers. The first downside target is a minor pivot at 112.818. Since the main trend is up, buyers could come in on the first test of this level. If it fails then look for the selling to possibly extend into the 50% level at 112.156.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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