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USD/JPY Regains Strength, US CPI Increased 3.4%

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Aayush Jindal

Key Highlights

  • USD/JPY started a fresh increase above the 145.00 resistance.
  • A key bullish trend line is forming with support at 145.35 on the 4-hour chart.
  • Gold prices failed to clear the $2,050 resistance and declined again.
  • The US CPI increased 3.4% in Dec 2023 (YoY), whereas the market forecast was 3.2%.

USD/JPY Technical Analysis

The US Dollar started a decent increase from the 143.40 support against the Japanese Yen. USD/JPY broke many hurdles near 144.50 and 145.00 to move into a bullish zone.

Looking at the 4-hour chart, the pair gained pace for a move above the 145.50 resistance. The pair even settled above the 145.50 level, the 100 simple moving average (red, 4 hours), and the 200 simple moving average (green, 4 hours).

Finally, there was a move above the 146.00 level and then the US CPI report was released. The market was looking for a 3.2% rise in the CPI in Dec 2023 (YoY), but the outcome was 3.4%. This could dent the US Dollar in the short term.

On the upside, immediate resistance is near the 146.80 level. The next key resistance is near the 147.20 level. A close above the 147.20 zone could open the doors for more upsides. The next stop for the bulls might be 148.00.

If there is a fresh decline, the pair might test the 145.35 support. There is also a key bullish trend line forming with support at 145.35 on the same chart.

The next major support sits at 144.70. A downside break below the 144.70 zone could spark a sustained decline. The next major support is 143.40, below which the pair might decline and test 142.00.

Looking at Gold, the bulls failed to push the price above the $2,050 resistance and now there is a risk of more downsides.

Economic Releases

  • UK GDP for Nov 2023 (MoM) - Forecast +0.2%, versus -0.3% previous.
  • UK Industrial Production for Nov 2023 (MoM) - Forecast +0.3%, versus -0.8% previous.
  • UK Manufacturing Production for Nov 2023 (MoM) - Forecast +0.3%, versus -1.1% previous.
  • US Producer Price Index for Dec 2023 (MoM) – Forecast +0.1%, versus 0% previous.
  • US Producer Price Index for Dec 2023 (YoY) – Forecast +1.3%, versus +0.9% previous.
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