• US headline CPI fell short of consensus estimates; core CPI, yearly rate match expectations.
• US initial weekly jobless claims fall more than anticipated and partly offset softer CPI print.
• Improving risk appetite weighs on JPY’s safe-haven appeal and remains supportive.
The USD/JPY pair held on to its strong gains near six month tops and had a rather muted reaction to the mixed US macro data.
The pair moved little and remained near mid-112.00s after the latest US CPI print fell short of consensus estimates and came in to show 0.1% m/m rise as against 0.2% anticipated, albeit yearly rate climbed to 2.9%, as was anticipated.
This coupled with mostly in line core CPI figures, which excludes volatile food and energy prices, and a larger than expected decline in the initial weekly jobless claims negated a slight disappointment from the headline reading and did little to dent the prevailing strong bullish sentiment surrounding the US Dollar.
It would now be interesting to see if the pair continues with its upward trajectory or bulls opt to take some profits off the table, especially after this week's strong upsurge of over 200-pips.
Technical levels to watch
A follow-through buying interest has the potential to continue lifting the pair further towards reclaiming the 113.00 handle en-route 2018 yearly high level of 113.39.
On the flip side, immediate support is now pegged near the 112.25 area and is closely followed by the 112.00 handle, below which the pair could correct back to previous resistance now turned support near the 111.40 region.
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