USDJPY hits 144 ahead of US CPI but reversal seems imminent


USD to JPY price was trading at 144 on Thursday morning ahead of the upcoming US inflation data. The Japanese Yen remained under pressure against the US dollar throughout this week weighed down by the mixed comments from the FED policymakers and triggering a steady recovery in the US Dollar. The U.S. dollar index jumped to a four-week high of 102.80 last week.

The pair price has been volatile in the past 4 weeks as investors focus on the converging sentiment between the US Federal Reserve and the Bank of Japan. After a one-month pause to its interest rate hiking campaign, the U.S. Federal Reserve increased the interest rate margin again at the end of July - from 5.25 percent to 5.5 percent. Meantime, the Bank of Japan (BOJ) has decided to maintain its low interest rates but has made changes to its yield curve control policy allowing 10-year government bond yields to fluctuate in the range of around 0.5%. This is an early sign that the bank is willing to take an aggressive tone in the coming months.

USDJPY reversal seems imminent

Turning to the 4H chart, the pair appears to be tired here. It lacks conviction for a decisive move above 144. On the daily chart, we also see that the pair has been in a strong bullish trend in the past few months. As of this writing, the USDJPY slightly retreated to 143.80 from the daily highs. On the downside, the decline is more extensive, and it will be hard to rule out a pullback towards 142.80 and 141.60 if it fails to extend upside momentum. On the bullish side, the currency pair settles above 144 then the next crucial supply area to focus 144.40 then the psychological resistance at 145.


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