How to trade the US Inflation data with USD/JPY

  • The US Consumer Inflation data and especially Core CPI are critical the US Dollar.
  • The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.
  • The USDJPY moved, on average, 35 pips in the 15 minutes after the data release and 52 pips in the following 4 hours

Tradeable figure: Consumer Price Index Ex Food & Energy (YoY) - United States

Buying USD/JPY Scenario

  • Tradable Negative Trigger: +1.81 deviation (2.47%) [BUY Pair]

  • Key Support Level: 111.80

This time, if it comes out at higher than expected with a relative deviation of 1.81 or higher(2.47 or higher in actual terms), the pair may go up reaching a range of 21  pips in the first 15 minutes and 55 pips in the following 4 hours.

111.80 was the peak in late August. It is followed by 112.15 which capped the pair in late July and then by the swing high of 113.15. 

Selling USD/JPY Scenario

  • Tradable Positive Trigger: -1.33 deviation (2.34%) [BUY Pair]

  • Key Resistance Level: 110.70

If it comes out lower than expected at a relative deviation of -1.33 or less(2.34 or lower in actual terms), the USDJPY may go down reaching a range of 23 pips in the first 15 minutes and 47 pips in the following 4 hours.

110.70 was a support line in late August. 110.10 was a swing low back in mid-August. The 109.70 was the low in August and the lowest since June.

USD/JPY Levels on the Chart

USD JPY Technical Analysis September 13 2018

More data

Core inflation reached a new cycle high of 2.4% YoY in July, adding another argument for the Fed to raise rates. We will now receive the figures for August. 

More: US inflation preview: Expect a straightforward USD reaction, the Fed may find its limits

In the last five releases, the USDJPY moved, on average, 35 pips in the 15 minutes after the data release and 52 pips in the following 4 hours. The previous release had a positive surprise of 2.50 in terms of relative deviation and the USDJPY reached an 18 pip range in the first 15 minutes and a range of 35 pips 4 hours thereafter.

Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

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