USD/JPY Forex Technical Analysis – 114.969 Potential Trigger Point for Acceleration into 115.501 – 115.615

The Dollar/Yen soared on Monday as U.S. Treasury yields rose after President Joe Biden renominated Jerome Powell for a second term as Federal Reserve chair. A move interpreted as hawkish by investors.

Biden on Monday morning announced Powell as his pick for the central bank chief nomination in a closely-watched decision. The president named Fed Governor Lael Brainard, seen as the main competition for the top job, as vice chair.

On Monday, the USD/JPY settled at 114.869, up 0.846 or +0.74%.

If Brainard had been nominated for the top Fed position, many expected more dovish monetary policy, meaning it may have taken the Fed longer to pull back its emergency stimulus measures.

Daily Swing Chart Technical Analysis

The main trend is down according to the daily swing chart. A trade through 114.969 will change the main trend to up. A move through 113.591 will signal a resumption of the downtrend.

The short-term range is 112.728 to 114.469. Its retracement zone at 113.849 to 113.584 is support.

Daily Swing Chart Technical Forecast

The direction of the USD/JPY early Tuesday is likely to be determined by trader reaction to 114.969.

Bullish Scenario

A sustained move over 114.969 will indicate the uptrend is getting stronger. If this move is able to generate enough upside momentum then look for an acceleration into the March 10, 2017 main top at 115.501, followed by the January 19, 2017 main top at 115.615.

Bearish Scenario

A sustained move under 114.969 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into 114.280.

Counter-trend buyers could come in on a test of 114.280. They will be trying to form a potentially bullish secondary higher bottom. If it fails then look for a possible retest of 113.849 to 113.584.