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