USD/JPY declines after soft US CPI, falling yields

The USD/JPY declined towards to 150.90, seeing 0.50% loses
Headline and Core CPI in the US decelerated in October.
The US Treasury yields are tanking, weakening the US Dollar.

Patricio Martín FXStreet

On Tuesday, the USD/JPY fell sharply towards the 150.90 area, seeing nearly 0.50% losses. The pair declined amid soft Consumer Price Index (CPI) data from the US, which fueled a decline in US Treasury yields and hawkish bets on the Federal Reserve (Fed).

The US Bureau of Labor Statistics (BLS) revealed that inflation in the US decreased to 3.2% YoY in October, based on the changes in the Consumer Price Index (CPI). The Core CPI, which excludes the volatile prices of food and energy, witnessed a 4% increase during the same period, failing to meet the analysts' predicted 4.1% rise. On a monthly basis, the headline CPI remained stable, while the Core CPI encountered a 0.2% growth.

As a reaction, the US Treasury yields with the 2,5 and 10-year rates declined more than 2% to 4.86%, 4.46% and 4.48%, respectively, which seems to be pushing the pair upwards. Focus now shifts to Wednesday’s Producer Price Index (PPI) and Retail Sales figures from October to continue placing their bets on the next Fed meetings.

USD/JPY levels to watch

On the daily chart, the USD/JPY has a neutral to bearish bias with a consolidation phase underway, suggesting that the buyers are regrouping after a six-day winning streak. The Relative Strength Index (RSI) has a negative slope above its midline, indicating weakening buying pressure, while the Moving Average Convergence (MACD) presents shorter green bars. In the larger context, despite showing a negative outlook in the short-term, the pair is above the 20,100,200-day Simple Moving Average (SMA), suggesting that the bulls are firmly in control in the broader context.

Supports: 150.30 (20-day SMA), 150.00, 149.00.
Resistances: 151.00, 151.70, 152.00.

USD/JPY daily chart

USD/JPY

Overview
Today last price	150.93
Today Daily Change	-0.72
Today Daily Change %	-0.47
Today daily open	151.65

Trends
Daily SMA20	150.34
Daily SMA50	149.22
Daily SMA100	146.25
Daily SMA200	141

Levels
Previous Daily High	151.91
Previous Daily Low	151.21
Previous Weekly High	151.6
Previous Weekly Low	149.35
Previous Monthly High	151.72
Previous Monthly Low	147.32
Daily Fibonacci 38.2%	151.64
Daily Fibonacci 61.8%	151.48
Daily Pivot Point S1	151.27
Daily Pivot Point S2	150.89
Daily Pivot Point S3	150.57
Daily Pivot Point R1	151.97
Daily Pivot Point R2	152.29
Daily Pivot Point R3	152.67

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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