USD/JPY to enjoy further gains on a break above 109.67
|USD/JPY keeps trading around 109.50, pretty much unchanged on a weekly basis. US inflation and the ECB are set to take over while the pair is neutral in the near-term, with the risk skewed to the upside, FXStreet’s Chief Analyst Valeria Bednarik briefs.
See – US CPI Preview: Forecasts from eight major banks for critical May inflation
Investors wait for inflation-related news
“The US will publish today the final reading of its May headline inflation, foreseen at 4.7% YoY vs the previous estimate of 4.2%. Some analysts believe it could even hit 5%. Higher inflation levels would need a response from the US Federal Reserve, that is, pull out some of the massive stimulus meant to support the economy. Stocks will suffer the most, while US Treasury yields would likely jump higher alongside the dollar.”
“The European Central Bank will announce its monetary policy. Should it maintain a cautious stance, it will highlight the imbalances between the Fed and its counterparts, exacerbating the market’s reaction to the news.”
“Further gains are likely on a break above 109.67, the immediate resistance level, while bears will likely take over on a break below 108.90.”
See – European Central Bank Preview: Forecasts from 13 major banks
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