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FxWirePro: USD/JPY consolidates break below 200-dma, US CPI and retail sales data in focus for further impetus

USD/JPY consolidates break below 200-dma, US CPI and retail sales data in focus for further impetus

  • USD/JPY struggled to build on its tepid recovery after US economic releases disappointed overnight.
  • US PPI unexpectedly contracted in December, while weekly jobless claims also missed expectations.
  • Producer Price Index (PPI) came in at -0.1% m/m as against 0.4% rise recorded in the previous month. Initial weekly jobless claims rose to 261K during the week ended Jan. 6.
  • USD/JPY is extending massive downside following Tuesday’s reduction in JGBs purchases by the BoJ.
  • Technically, the pair is trading with a bearish bias. Indicators on daily charts support more downside.
  • The pair has broken major supports and is currently hovering around 111.26, scope for test of 110 levels.
  • Upside capped at 200-DMA at 111.69, bearish invalidation on retrace above.
  • Markets focus on US CPI and retail sales data due later in the NY session for further impetus.

Support levels – 111, 110.84 (Nov 27 low), 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally).

Resistance levels – 111.69 (200-DMA), 112, 112.21 (100-DMA)

Recommendation: Hold for targets.

FxWirePro Currency Strength Index: FxWirePro’s Hourly USD Spot Index was at -102.875 (Bearish), while Hourly JPY Spot Index was at 37.755 (Neutral) at 0400 GMT.

Source: FXWire Technicals

 

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