How to trade USD/JPY amid US Consumer Price Index news

Usman Ahmed Forex92

The U.S. Dollar (USD) skyrocketed against the Japanese Yen (JPY) the last week, increasing the price of the USDJPY pair to more than 109.00 ahead of the release of U.S. Consumer Price Index news.

Technical Analysis

As of this writing, the USDJPY pair strengthens around 109.10. The pair might face some resistance near the listed below price levels:

Short-Term Resistance

109.53 – the major horizontal resistance

110.95 – the high of May 05, 2019

112.00 – the psychological level

*USDJPY Weekly Chart – Source MetaTrader4*

On the downside, the pair might find some sustainability near the listed below support levels:

Short-Term Support

107.92 – the key horizontal support

107.00 – the psychological number

106.32 – the 38.2% fib level support

U.S. Consumer Price Index News

The U.S. Department of Labor Statistics is all set to release numbers for the consumer price index tomorrow (March 10, 2021). According to economists, the consumer price index might improve and register a reading of 0.2% in February, as compared to a reading of 0.0% in the month before.

The Consumer Price Index (CPI) estimates the change in the prices of retail products. It compares the prices of different products, including goods and services after selecting them from a representative shopping basket on a sampling basis. It is worth mentioning here that the index doesn’t include prices of volatile items, such as food and energy to avoid a biased reading. Generally speaking, a high reading strengthens the U.S. Dollar and suggests a bullish trend for the USD/JPY and vice versa.

Conclusion

Considering the price movement of the precious metal over the past few days, it may be a better option in the short term if the pair was bought at around 108.00. Due to the volatile nature of the market, however, prices may change and lead to different outcomes.

Author

Usman Ahmed

Forex92

Usman Ahmed is a currency trader and financial market analyst with more than a decade of active trading experience.

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