USD/JPY reacts higher on rising Japan CPI

FXstreet.com (Barcelona) - The USD/JPY foreign exchange rate is last trading near session highs at 99.37 following latest Japan CPI data showing 3rd consecutive month increase for first time since mid 2011.

USD/JPY bearish potential has increased

According to Valeria Bednarik, Chief Analyst at Fxstreet.com: “In the 1 hour chart, 100 SMA converges with 200 SMA now at 99.80, both gaining some bearish slope and anticipating further falls in the pair. In the 4 hours chart bearish potential has also increased, with indicators heading lower although still too close to their midlines.”

USD/JPY key technical levels

Bednarik locates support levels at: 99.20, 98.80 and 98.35, while resistance levels at: 99.70, 100.00 and 100.30.

Inflation picking up in Japan

The latest Japanese CPI release indicates that some minor inflation pressure are starting to be noted. JPY National Consumer Price Index (YoY) (Jul) came at 0.2%vs 0.1% exp and -0.3% last. The National CPI Ex-Fresh Food (YoY) (Jul) also known as 'Core' stood at 0.4%vs 0.3% exp and 0.0% last. The National CPI Ex Food, Energy (YoY) (Jul) was -0.2%vs--0.3% exp and -0.4% prior. In Tokyo, the Consumer Price Index (YoY) (Jul) came at 0.4% vs 0.2% exp and 0.0% last, the CPI ex Fresh Food (YoY) (Jul) saw 0.3%vs 0.3% exp and 0.2% last. Lastly, the CPI ex Food, Energy (YoY) (Jul) stood at -0.4%vs -0.4% exp and -0.4% prior.
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