USD/JPY forecast
- USD/JPY Rebound on Tuesday after poor performance in the past few trading sessions
- America is hotter than expected consumer price index data backs it up USDrebound of
- Traders should keep an eye on the upcoming PPI report for a clearer picture of the inflation outlook.
Most read: US inflation higher than expected, USD slightly bid, gold adrift
Already on an upward trajectory on Tuesday morning, USD/JPY’s gains accelerated after the US Consumer Price Index beat expectations in February, an event that pushed US Treasury yields across the curve. . By way of background, both the composite CPI and the core CPI exceeded expectations, with the former at 3.2% and the latter at 3.8%, both exceeding expectations by a tenth of a percentage point.
US inflation data
sauce: DailyFX Economic Calendar
While Tuesday’s data did not significantly change the likelihood of the FOMC’s first rate cut in June, the report does suggest that inflation pressures remain highly resistant and remain in line with pre-COVID-19 trends. revealed the troubling fact that the number of This will not give the Fed the confidence it needs to begin easing policy. The market may not agree with this assessment at the moment, but it has been wrong many times in the past.
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Possibility of FOMC meeting
Source: CME Group
It is important to keep an eye on Thursday’s PPI numbers to further clarify the outlook for consumer prices. Another upside surprise like today could be a wake-up call that Wall Street needs to recognize that it is underestimating inflation risks. This could stimulate a hawkish reassessment of interest rate expectations, pushing bond yields and the US dollar higher in the process.
sauce: DailyFX Economic Calendar
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USD/JPY Forecast – Technical Analysis
USD/JPY rebounded on Tuesday and broke through resistance near the 147.50 level. If this breakout is confirmed on the daily candlestick, the price could start to move higher in the coming days, setting the stage for a possible rally towards 148.90. In terms of further strength, attention will be focused on 149.70.
On the other hand, if the sellers come back and push the exchange rate back below 147.50, the pair could slowly move back towards the confluence support between 146.50 and 146.00. Below this technical zone, all eyes will be on the 145.00 handle.
