USD/JPY: short-term bullish ahead of US CPI
|USD/JPY Current price: 107.26
- US yearly inflation seen steady at 1.8% in February.
- Japanese political scandal weighs on the yen as market mood improves.
The USD/JPY pair is the most active so far this Tuesday, up to its highest two weeks in the 107.20 region. Market players had second thoughts on the political scandal involving PM Abe and FM Aso and decided to sell the safe-haven currency, moreover as market mood turned positive, with equities sharply up in Asia, and marginally up in Europe. Investors are now waiting for the release of February US CPI, expected to have advanced just 0.2% monthly basis and to remain steady at 1.8% YoY. Such numbers won't be enough to change Fed's monetary policy guidance, with four rate hikes still on the table for this year, but surely won't be enough to boost the greenback.
Stocks´ reaction to a positive reading, will determine the fate of the greenback across the board, as renewed selling pressure within equities, will likely see the dollar down, rather than up, regardless of the outcome of the report.
In the meantime, the pair keeps advancing steadily, and 4 hours chart shows that it stands at daily highs, with technical indicators maintaining their upward momentum within positive territory, and at their highest for this week, as the price extends above a directionless 100 SMA. The 200 SMA in the mentioned chart heads modestly lower around 107.60, providing an immediate resistance ahead of the 108.00 figure. A slide below 107.00, on the other hand, will see next supports at 106.60 and 106.35.
Support levels: 107.00 106.60 106.35
Resistance levels: 107.60 108.00 108.40
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