USD/JPY falls more than 250 pips after US CPI

US inflation slows more than expected in November.
Japanese yen soars across the board following the report.
USD/JPY drops below 135.00 to one –week lows.

Matías Salord FXStreet

The USD/JPY collapsed after the release of US inflation data. The pair dropped from 137.60 to as low as 134.60, reaching the lowest level in a week and approaching the multi-month low of 133.58.

Inflation slows down, FOMC meeting

The US Consumer Price Index rose in November by 0.1%, below the 0.3% of market consensus. The annual rate fell from 7.7% to 7.1%, reaching the lowest level in almost a year. Inflation numbers eased expectations about the future path of Fed rate hikes.

Following the numbers the US dollar collapsed across the board and the Japanese Yen soared, boosted by a rally in Treasuries. US bond yields sank with the US 10-year falling from 3.60% to 3.43%. The DXY is falling by 1.15% under 104.00.

On Wednesday, the Federal Reserve will announce its decision on monetary policy. A 50 basis points rate hike is expected. New macroeconomic forecast will be released. Powell will hold a press conference.

USD/JPY looking at the recent low

The sharp decline in USD/JPY damaged significantly the outlook for the Dollar. Price is back under the 200-day Simple Moving Average. Currently is testing the 135.00 area and a break under 134.60 would expose the next support around 134.10. Below attention would turn to the monthly low at 133.60.

Technical levels

USD/JPY

Overview
Today last price	134.84
Today Daily Change	-2.88
Today Daily Change %	-2.09
Today daily open	137.72

Trends
Daily SMA20	138.31
Daily SMA50	143.21
Daily SMA100	141.1
Daily SMA200	135.16

Levels
Previous Daily High	137.85
Previous Daily Low	136.45
Previous Weekly High	137.86
Previous Weekly Low	134.13
Previous Monthly High	148.82
Previous Monthly Low	137.5
Daily Fibonacci 38.2%	137.31
Daily Fibonacci 61.8%	136.98
Daily Pivot Point S1	136.83
Daily Pivot Point S2	135.94
Daily Pivot Point S3	135.42
Daily Pivot Point R1	138.23
Daily Pivot Point R2	138.74
Daily Pivot Point R3	139.64

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

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