USD/JPY Rising Ahead of US Inflation Data
- US CPI expected to fall to 6%
- Could High Inflation Rekindle Aggressive Rate Hike Bets
- UUS/JPY found support at the SMA-50
the pair USD/JPY fell to a monthly forex low yesterday amid ongoing products from Silicon Valley Bank. Fears of a crack in the financial system caused investors to moderate their expectations for a rate hike.
The market now expects a 25 basis point increase in March, compared to 50 basis points previously, some market participants thought the Federal Reserve might not increase at all this month.
The final piece of the puzzle will be today’s inflation data. The CPI is expected to slow to 6% in annual growth, from 6.4% in January. Core inflation is expected to fall to 5.5% from 5.6% in January.
Although inflation is expected to continue to cool, the process could be long and slow.
A prevailing warmer inflationary picture could increase bets for a bigger rate hike, boosting the US Dollar.
What is the forex future for the USD/JPY pair?
After reclaiming the 200-day moving SMA, the USD/JPY pair bounced lower, passing through the 100-day moving SMA and the multiple bullish channel before finding support at the 50-day moving average SMA at 132.30 a plus based on the month. The RSI supports an additional base.
USD/JPY Daily Chart
Sellers may look for a break below 132.30 to extend the downtrend, putting 130.00 psychological level in focus ahead of 129.80 Feb 10th low.
Buyers could look for a rise above 134.80 January high to expose the 100-day moving average SMA at 135.75 bringing the 200-day moving average SMA back to 137.40 in target.
By Fiona Cincotta, FOREX.com » Official Site
Fiona has a deep understanding of market fundamentals gained from her 15 years of experience in the financial markets. It provides analysis and up-to-date information on financial markets, as well as economics and monetary policy in the UK, US, Europe and Asia. She is regularly quoted in the global financial press, she is named often quoted in the Financial Times, The Telegraph, Reuters and Bloomberg.
Disclaimer: The information and opinions contained in this report are provided for general information only and do not constitute an offer or solicitation to buy or sell forex cambio contracts or CFDs. Although the information contained in the document comes from sources believed to be reliable, the author does not guarantee its accuracy or completeness, and assumes no responsibility for any direct, indirect or consequential damages which may result in a breach.