The dollar has regained bullish traction on Friday and is rallying nearly 0.5% so far today, erasing the previous two days’ losses. The USD/JPY is testing levels above 114.00 at the time of writing, after having bounced up from two-week lows at 113.25 on Thursday. The US core personal consumption expenditures, the Fed’s preferred indicator for consumer inflation, has risen 3,6% year-on-year in September, which adds pressure on the bank to start increasing interest rates. As a consequence, US-T bond yields ticked up on the back of these figures, pushing the US dollar higher across the board. The greenback has been boosted by higher inflation expectations in the US, which have reinforced the idea that the Federal Reserve will be forced to accelerate its monetary policy normalization plan.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

it will be prudent to wait for a strong follow-through buying beyond the 114.00 mark before confirming that the recent corrective pullback has run its course. This will set the stage for a move beyond multi-year tops, around the 114.70 region touched last week, and push the USD/JPY pair further towards reclaiming the key 115.00 psychological mark.

As long as 113.71/74 res holds, consolidation with downside bias remains and below 113.22/26 sup would extend decline from October's 114.69 peak to 113.01, then 112.70/75 later today or Friday.
Offers are tipped at 113.60/70 with stops above 113.75 n more above 113.90 while bids are noted at 113.40-30 with stops below 113.20. Pay attention to PCE price index, Chicago PMI n University of Michigan consumer confidence, if actual readings of the two latter data come in weaker than street forecast, then the greenback would come under renewed selling.

King Dollar Trying To Break Above 114.0

Oct 31 2021