USD/JPY: Sell the rallies ahead of US CPI?
|US$Jpy had a bad day on Tuesday, breaking below the trendline stretching back to 2012 and falling to a low of 107.40 ahead of a bounce, in line with slightly firmer US stocks, although that correlation seems to have largely broken down over the last couple of days. The dollar weakness seems to be all about cutting risk positions ahead of today’s US CPI figure, and if we see a miss, (exp 0.3% mm, 2.1% yy, Ex Food/Energy; 1.8%yy) expect the dollar to head a fair bit lower.
1 hour/4 hour indicators: Turning lower
Daily Indicators: Turning lower
Weekly Indicators: Neutral
Preferred Strategy: US$Jpy did manage to bottom out ahead of the 2017 low at 107.32, ahead of the minor bounce, and this remains the major level of support to watch. A downside break though, would then see little support until the 200 MMA at 105.70, so it could be a fairly rough for the dollar if the CPI underperforms.
| Resistance | Support | ||||
| 108.77 | Session high | 107.40 | Session low | ||
| 108.50 | Minor | 107.31 | 8 Nov low | ||
| 108.25 | Minor | 107.00 | Minor | ||
| 108.00 | Minor | 106.70 | Minor | ||
| 107.85 | Minor | 106.50 | Minor | ||
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