USDJPY Technical Analysis – All eyes on the US CPI

Fundamental Overview

The USD remains mostly rangebound even though the better than expected NFP report triggered a slightly more hawkish repricing in interest rates expectations and sent Treasury yields higher.

The next two key events for the greenback are the US CPI today and the FOMC decision next week. The dollar will need hawkish stuff to get a boost.

On the JPY side, the currency remains weak almost across the board as the BoJ is said to reduce its bond buying tapering plan and we continue to hear from officials that a change in rates is not going to happen anytime soon. The central bank continues to wait for US-Japan trade deal and the evolution of inflation.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that USDJPY is consolidating between the 142.35 and 146.00 levels. We’ve been ranging for quite some time as the market continues to wait for stronger signals to pick a direction. For now, the target for the buyers remains the 148.32 resistance, while the sellers will look for a break below the 142.35 support to extend the drop into the 140.00 handle next.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a support zone around the 144.32 level. This is where we can expect the buyers to keep stepping in with a defined risk below the support and target the 146.28 level. The sellers, on the other hand, will look for a break lower to pile in for a drop back into the 142.35 support.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor upward trendline defining the bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline to keep pushing into new highs, while the sellers will look for a break below the trendline and the support to target the 142.35 level next. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US CPI. Tomorrow, we get the latest US Jobless Claims figures and US PPI. On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.

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