On the daily chart below for USDJPY, we can see that after the big selloff after the miss in US Job Openings, the price bounced from the 135 handle and the red long period moving average. The strong NFP report last Friday gave the USD a boost as Treasury yields rose due to some fear of persistently high inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term.

The price has been moving pretty sideways since then as the market awaits the US CPI report today to decide where to go next. The market is still pricing a Fed pause in June and rate cuts starting in September, so today’s CPI is important because a hot reading can cause a repricing and a big rally.

USDJPY technical analysis

On the 4 hour chart below, we can see that the pair has been trading within a rising channel into the 138 handle. The price is now consolidating near the lower bound of the channel as the market awaits the CPI report.

The moving averages have crossed to the upside so the bias is bullish, but the next move will be decided by the data anyway. In case we get higher than expected data, we should see the pair rally and the 138 handle being again the target. On the other hand, a miss to the expectations should make the pair to fall with the 133 handle being the first target.

On the 1 hour chart below, we can see that since the NFP report the price has just been ranging around the 135 handle although with a bullish tilt. This is a clear sign of indecision trading into a big risk event. Watch out for the data today!