USD/JPY extends losses below the 20-Day SMA, eyes on Japanese GDP and US PPI

The USD/JPY plunged towards, down by 0.95%.
The pair is battling to hold the 20-day SMA, critical support since late July.
After the CPI’s volatility, markets focus to the Japanese Q3 GDP figures, US PPI and Retail Sales data on Wednesday.

Patricio Martín FXStreet

The USD/JPY suffered significant setbacks in Tuesday's session, falling towards the trajectory of the pair being set by soft CPI data from the US. Now, the focus shifts to high-tier data from both countries to be released on Wednesday.

In October, consumer price inflation in the United States was lower than expected, as indicated by the flat monthly headline Consumer Price Index (CPI). Additionally, prices in the core segment also demonstrated weaker growth than anticipated, registering a 0.2% increase MoM while the YoY measure decelerated to 4%. What weakened the USD was markets betting on a less aggressive Federal Reserve and the hopes on a sooner rate cuts, which fueled a wave of risk-on flows.

On the other hand, preliminary Gross Domestic Product (GDP) figures from Japan will likely impact the dynamics of the pair as it could fuel hawkish bets on the Bank of Japan (BoJ). It's worth noticing that former Bank of Japan BoJ official Hideo Hayakawa will likely raise rates by April 2024, so in case the economy shows strong figures, the JPY may strengthen. That being said, markets are forecasting a 0.6% annualised contraction from its previous 4.8% reading.

USD/JPY levels to watch

The USD/JPY displays a neutral to bearish technical bias on the daily chart, with signals suggesting that the bears are gaining ground. The Relative Strength Index (RSI) points south below its middle point, while the Moving Average Convergence (MACD) histogram exhibits flat green bars. Surveying the larger context, despite the bears gaining ground and pushing the pair just below the 20-day Simple Moving Average (SMA), it is still above the 100 and 200-day SMAs, suggesting that the bulls are common on the broader time horizon.

Supports: 150.30 (20-day SMA), 150.00, 149.00.
Resistances: 151.00, 151.50, 153.00

USD/JPY daily chart

USD/JPY

Overview
Today last price	150.24
Today Daily Change	-1.41
Today Daily Change %	-0.93
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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