The dollar is stuck in the doldrums against the yen, caught between two key technical indicators suggesting it will remain in a range until U.S. jobs data this week, according to IG Markets Securities Ltd.
The U.S. currency tested last week the 76.40 percent Fibonacci retracement of the high reached June 5 and the low set July 8, climbing 0.01 yen above it to 124.58 yen on July 30 before falling back. It has also rebounded each time after falling toward the ichimoku-cloud that’s acting as a floor amid speculation the Federal Reserve will raise interest rates this year. The greenback was at 124.08 at 9:27 a.m. in Tokyo on Monday, while the top of the cloud was 123.47.
Having risen for three straight days through July 30, the the dollar may be prone to selling, Ishikawa said, before the release of U.S. reports this week on nonfarm payrolls, wages and unemployment. The greenback may test the top of the ichimoku cloud at 123.36, he said.
Breaking the currency’s recent range will require stronger U.S. data on wages and labor costs, said Jun Kato, senior fund manager in Tokyo at Shinkin Asset Management Co. The dollar may climb toward 125 yen as soon as this month, he said.