Key Highlights
- USD/JPY dived over 250 pips from the 161.80 resistance zone.
- It traded below a key bullish trend line with support at 160.90 on the 4-hour chart.
- The US CPI slowed more than expected and came in at 3% in June 2024 (YoY).
- There were speculations of BOJ’s intervention after USD/JPY declined over 2%.
USD/JPY Technical Analysis
The US Dollar failed to extend gains above 162.00 against the Japanese Yen. USD/JPY started a sharp decline and traded below the 160.00 level after the US CPI report.
Looking at the 4-hour chart, the pair declined heavily below a key bullish trend line with support at 160.90. The pair even settled below the 160.00 level and the 100 simple moving average (red, 4-hour). Finally, there was a spike below the 158.50 support and the 200 simple moving average (green, 4-hour).
It tested the 157.50 support before the bulls appeared. If there is a recovery wave, the pair could face resistance near the 159.20 level. The next resistance sits at 159.60.
The main hurdle sits at 160.00 and the 100 simple moving average (red, 4-hour). A clear move above the 160.00 resistance might send it toward the 160.80 level. Any more gains might open the doors for a test of the 161.80 zone in the coming days.
Immediate support is near the 157.50 level. The next major support is near the 156.20 level. A downside break and close below the 156.20 support zone could open the doors for more losses.
Looking at Gold, the price gained bullish momentum after the US CPI release and rallied above the $2,400 level.
Economic Releases
- US Producer Price Index for June 2024 (MoM) – Forecast +0.1%, versus -0.2% previous.
- US Producer Price Index for June 2024 (YoY) – Forecast +2.3%, versus +2.2% previous.
