The surprising CPI report put material pressure on the American currency.
USDJPY managed to pass above the short-term resistance zone of 161.95 which shows a strong advance still ongoing. Prices fell toward 160.50-70 on the suspected intervention before bouncing back.
USD/JPY was on the rising trajectory in early May-early July. However, in a contrarian move, it's trading sideways amid renewed US-Iran war.
USD/JPY Price Forecast: Slides to 162.00 as constructive setup favors bulls before US CPI
USD/JPY ended Tuesday at 162.27, with the Japanese yen remaining near 40-year lows. Pressure on the currency persists, as Japanese authorities have yet to carry out fresh interventions to support the exchange rate.
Japanese yen volatility has returned as traders unwind record short positions ahead of US CPI. With USD/JPY testing major resistance below 163 and intervention risks lingering, futures positioning suggests gains may become harder to come by.
For a while now my favored major pair for USD-strength is USD/JPY, and that remains in force as we trade into the second half of the year. At this point USD/JPY is on the verge of fresh 40-year highs and the next obvious waypoint along the way is the 165.00 handle that was last in-play back in 1986.
Rising geopolitical tensions provided support to the American currency.
USD/JPY and the U.S. Dollar Index are approaching critical technical levels. Razan Hilal, FOREX.com Market Analyst, explains why the Dollar Index holding above 100 could fuel a major USD/JPY breakout toward 170 and beyond, while identifying the key support levels that could instead trigger a bearish reversal for both the dollar and the yen.
Crude oil prices rose at the start of the week after President Trump said the ceasefire was over and fighting had started again. Stock markets fell, while USD/JPY moved back toward recent highs.
Rising inflation and bond yields keep another BOJ rate hike in focus, while USDJPY, GBPJPY and EURJPY remain bullish above key support levels.
The American currency is losing ground ahead of the weekend.