USD/JPY Current price: 108.28
- Japanese data released overnight mostly discouraging.
- US December inflation is seen stable at 2.2% YoY.
The USD/JPY pair trades mute around 108.30, hovering around the key Fibonacci level since Thursday, US session. The positive clues coming from equities' strength is being offset by the lack of demand for the greenback, following the US Central Bank monetary policy developments from this week. Japanese data released overnight came in mixed, with the only positive note being an uptick in bank lending to 2.4% YoY. However, Overall Household Spending posted a larger-than-expected decline in November, falling by 0.6%, while the Eco Watchers Survey indicated decreasing confidence in local businesses, with the assessment of the current situation down to 48.0 from 51.0, and the outlook shrinking to 48.5 from 52.2.
The US will release today December inflation data. When compared to November, is expected to have declined by 0.1%, although the annual reading is seen steady at 2.2%. The core readings are foreseen at 0.2% and 2.2% respectively. Unless the results diverge from forecasts, the release may pass unnoticed.
Stuck around the 50% retracement of its 111.41/105.16 decline, the pair retains its bearish short-term stance, as, in the 4 hours chart, it continues developing well below firmly bearish 100 an 200 SMA, while technical indicators gain downward traction below their midlines. The 61.8% retracement of the same decline has contained bulls this week at around 109.05, with gains above the level putting the pair in bullish ground. It will turn negative with more slides expected on a break below the weekly low of 107.76.
Support levels: 108.00 107.75 107.40
Resistance levels: 108.60 109.05 109.30
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