USD/JPY Forecast: Bulls preparing for a breakout
|USD/JPY Current Price: 109.63
- Tokyo inflation seen advancing just modestly in December, core CPI foreseen at 0.6%.
- BOJ ready to act, should momentum toward 2% inflation came under threat, says Kuroda.
- USD/JPY continues pressuring December high at 109.72, bulls in control.
The USD/JPY pair has traded higher within range this Thursday, as a better market mood alongside dismal Japanese data weighed on the safe-haven currency. According to the official release, Construction Orders fell by 1.2% YoY in November, while Housing Starts in the same period declined by 12.7%. The Bank of Japan Governor Kuroda said that the central bank would ease policy further without hesitation if the momentum toward its 2% inflation goal came under threat, although he also sounded more confident in the global economic outlook.
This Friday, Japan will release December Tokyo inflation, with the core reading excluding fresh food seen up by 0.6% YoY, below the previous 0.8%. The country will also release November Retail Sales, foreseen down by 1.7% when compared to a year earlier, and the preliminary estimate of November Industrial Production.
USD/JPY short-term technical outlook
The USD/JPY pair is trading a few pips below 109.72, so far the highest for this December. The pair retains a bullish technical stance, as, in the 4-hour chart, the pair is holding well above all of its moving averages, with the 20 SMA heading higher at around 109.45 providing immediate support. Technical indicators in the mentioned chart lack directional strength but remain within positive levels, reflecting the lack of volume but also showing no selling interest around.
Support levels: 109.45 109.20 108.90
Resistance levels 109.75 110.00 110.40
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