USD/JPY near daily highs after US CPI data
|The greenback failed to react to the latest US inflation numbers and the USDJPY pair was trading flat during the US session, hovering at around 107.35.
After three months of 'deflation', consumer prices were expected to rebound strongly in June and it did, with headline CPI beating expectations (+0.6% MoM vs 0.5% expected). That is the biggest monthly jump since June 2019.
Moreover, the year-on-year inflation came out at 0.6%, up from 0.1% previously, while the core inflation stayed at 1.2%. Inflation is still below the Fed's target, which means the accommodative monetary policy is likely to stay, but the recent uptick in inflation might suggest that price pressures are mounting, which could be USD positive.
The intraday resistance might be found at 107.45 and if taken out, the greenback might continue higher toward 108.00.
Alternatively, the support should be at around 107.00 and if not held, the US dollar might depreciate to 106.70, where strong bids should be located.
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