USD/JPY Price Analysis: Declines towards 140.00 ahead of US core PCE Inflation data


  • USD/JPY continues to decline further towards 140.00 amid soft US Dollar.
  • Investors await the US core PCE price index data for further guidance.
  • USD/JPY may find an intermediate cushion near upward-sloping trendline.

The USD/JPY pair consolidates in a tight range near 142.00 after a sharp correction ahead of the United States core Personal Consumption Expenditure (PCE) price index data for November, which will be published at 13:30 GMT.

The core PCE inflation report is expected to remain soft as the Federal Reserve (Fed) has been keeping interest rates unchanged in the range of 5.25-5.50%. The downside in the major would continue if the underlying inflation turns out softer-than-anticipated. Meanwhile, deepening rate cut expectations from the Federal Reserve (Fed) have weighed heavily on the US Dollar Index (DXY). The USD Index has refreshed its four-month low around 101.55.

On the Tokyo front, Japan’s National Consumer Price Index (CPI) has remained above the 2% target for the 20th time in a row.  The Bank of Japan (BoJ) is expected to continue its ultra-dovish policy stance till wage growth in the Japanese economy gets high enough to keep inflation comfortably above 2%.

USD/JPY is consistently declining from more than one month. The downside momentum accelerated after a bearish crossover from the 20 and 50-day Exponential Moving Averages (EMA), which happened around 148.80. The asset is expected to decline further towards the upward-sloping trendline plotted from January 16 low at 127.22.

The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.000, pointing to continuation of a downside momentum.

Fresh downside would appear if the asset drops below December 14 low near 141.00. This would drag it towards the upward-sloping trendline near 139.40, followed by July 28 low near 138.00.

In an alternate scenario, a recovery move above December 19 high near 145.00 would drive the asset towards December 11 high around 146.60, followed by December 6 high near 148.00.

USD/JPY daily chart

USD/JPY

Overview
Today last price 141.99
Today Daily Change -0.24
Today Daily Change % -0.17
Today daily open 142.23
 
Trends
Daily SMA20 145.5
Daily SMA50 148.28
Daily SMA100 147.65
Daily SMA200 142.72
 
Levels
Previous Daily High 143.77
Previous Daily Low 142.05
Previous Weekly High 146.59
Previous Weekly Low 140.94
Previous Monthly High 151.91
Previous Monthly Low 146.67
Daily Fibonacci 38.2% 142.7
Daily Fibonacci 61.8% 143.11
Daily Pivot Point S1 141.6
Daily Pivot Point S2 140.96
Daily Pivot Point S3 139.88
Daily Pivot Point R1 143.31
Daily Pivot Point R2 144.4
Daily Pivot Point R3 145.03

 

 

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