As the US Consumer Price Index was released on Wednesday and revealed a lot larger inflation in the United States than previously expected, the US Dollar surged against the Japanese Yen. During five hours, the currency exchange rate surged by almost 100 base points or 0.90%.
Moreover, the surge slowly continued until it reached the 109.80 level and booked a new May high level. In the meantime, the 109.50 level was providing support to the currency exchange rate.
In the near term future, the rate could retrace back down by passing the support of the 109.50 mark and the weekly R1 at 109.45. In this case scenario the rate would most likely reach the combined support of the 55, 100 and 200-hour simple moving averages and this week’s high level zone just above the 109.00 mark.
Meanwhile, a potential surge would have to pass the 109.80 level and the 61.80% Fibonacci retracement level at 109.83 before reaching the 110.00 level.
