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
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.
Trading foreign exchange, indices and commodities, on margin, carries a high level of risk and may not be suitable for all individuals. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or other markets you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some, or all, of your initial investment. Therefore you should not invest money that you cannot afford to lose. Past performance is not a guarantee of future results. No guarantee is being made that any individual will be able to replicate our past performance results.
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