USD/JPY back around mid-110.00s, nearly 100-pips off N. Korean news-led swing lows

Haresh Menghani FXStreet

The USD/JPY pair reversed N. Korean headlines-led knee-jerk slide to 3-day lows and is now holding comfortably above the key 110.00 psychological mark.

The pair touched an intraday low near mid-109.00s during early Asian session on Friday in wake of the latest N. Korean missile launch, which passed over Hokkaido Island in northern Japan.

• North Korea has launched a missile - BNO News

Early dip, however, was bought into as the US Dollar was being supported by the latest US CPI print, which bettered expectations and showed a 1.9% y-o-y rise in August.

Thursday's stronger-than-expected rise in consumer prices, though indicated some impact from Hurricane Harvey, was still good enough to lift market expectations for additional Fed rate hike move by the end of this year and helped limit deeper losses, at least for the time being.

• CPI raises rate hike expectations - ANZ

Investors’ attention now turns to another day of important US macro data, with key focus on the monthly retail sales data for August.

• Key US retails sales outlook - Nomura

Technical levels to watch

A follow through momentum beyond mid-110.00s would assist the pair to make a fresh attempt towards conquering the 111.00 handle. Alternatively, weakness back below the 110.00 mark would turn the pair vulnerable to break below session lows near mid-109.00s and drop towards 109.25 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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