USDJPY Analysis
| Performance after Thursday | |||||
| Period | Pct | Chg | Momentum | ||
| Thursday | -0.28% | -42.3 Pips |  |
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| Week to-date | 4.1% | 584.999 Pips |  |
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| October | 3.43% | 492.299 Pips |  |
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Upcoming key events (London Time)
Fri 01:30 PM USD Producer Price Index (12-mth)
What happened lately
The United States observed a continuation in the trend of moderate inflation, with the Consumer Price Index (CPI) increasing by 0.2% on a seasonally adjusted basis in September. This marks the same increase as in the previous two months, according to the U.S. Bureau of Labor Statistics. Over the past year, the all items index has grown by 2.4%, representing the smallest 12-month increase since February 2021. This deceleration in inflation could suggest easing price pressures, providing a relatively stable economic environment and possibly impacting future monetary policy decisions by the Federal Reserve.
The USDJPY currency pair experienced a decrease of 0.28%, closing at 148.63 on Thursday. This downward movement could be linked to the recent inflation data from the United States, which indicates a weaker upward pressure on prices and could suggest that the aggressive monetary tightening from the Federal Reserve might slow down. Traders and investors pay close attention to economic indicators like CPI as they can signal future monetary policy directions. A gentle inflation rate may lessen the expectations for further interest rate hikes, thereby affecting the strength of the dollar against the yen. If upcoming data, such as the Producer Price Index, also reflects tame inflationary pressures, it might continue to exert downward pressure on USD, affecting USDJPY. Furthermore, the market participants will be keenly observing the Federal Reserve’s response to the inflation data, as any dovish signals could further influence the USDJPY movement. Overall, the moderate inflation figures imply a nuanced impact on USDJPY, potentially keeping the pair influenced by expectations surrounding monetary policy moves.
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What can we expect from USDJPY today?
USDJPY on Thursday dropped -0.28% to 148.63. Price is above 9-Day EMA while Stochastic is falling in overbought zone.
Updated daily direction for USDJPY looks bearish as the pair posted lower in Thursday trading session.
Looking ahead for the day, immediate support level is at 148.05 (S1) with break below could see further selling pressure towards 147.46 (S2). To the upside, with the current momentum bearish, we prefer to look at breakout of the recent daily high of 149.57 as a potential indicator of buying interest. Failure to break the resistance level would continue to echo bearish sentiment. A close below 148.23 would indicate selling pressure.
For the week to-date, take note that USDJPY is bullish as the pair continued to trade higher and is up by 4.1% over the past few days.
Key levels to watch out:
| R3 | 150.74 |
| R2 | 150.16 |
| R1 | 149.39 |
| Daily Pivot | 148.81 |
| S1 | 148.05 |
| S2 | 147.46 |
| S3 | 146.7 |