Fundamental Overview
Yesterday, the USD got a boost from a higher than expected US CPI report but gave back the gains pretty quickly. There are two reasons for such a reaction.
The first is that at the same time of the US CPI release we got the US Jobless Claims figures which jumped to the top of their yearly ranges. The culprit was attributed mainly to Hurricane Helene and the strikes.
The second reason is that the market was already positioned for a higher than expected reading as we’ve been seeing consistent upside in Treasury yields and the US Dollar in the days leading up to the release. Therefore, we got a “sell the fact” reaction.
On net, it was a slightly hawkish report but it looks like the market needs some more reasons to keep bidding the US Dollar.
USDJPY Technical Analysis – Daily Timeframe
On the daily chart, we can see that USDJPY rejected the key swing level at 149.40. The buyers will want to see the price breaking higher to increase the bullish bets into 152.00 handle next. The sellers, on the other hand, will keep on piling in around these levels with a defined risk above the swing level to position for a drop into new lows.
USDJPY Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have basically created a range between the 147.20 support and the 149.40 resistance. We will likely need a breakout on either side to increase the momentum and get a more sustained trend.
USDJPY Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the rangebound price action as the bullish momentum waned at the key 149.40 swing level. There’s not much else we can add here as the market participants will wait for either a breakout or a catalyst. The red lines define the average daily range for today.
Upcoming Catalysts
Today we conclude with the US PPI and the University of Michigan Consumer Sentiment report.