USDJPY Chart Technical Outlook set to decline toward 148.90 if US inflation continues falling
Break or bounce? USD/JPY is poking the recent peak of 149.58 and is hesitating to advance toward 150.05 and 152, the next levels, or retreat toward 148.90 and 148.28. The 4h-RSI is just under 70, implying there is room for small gains. The broad trend remains to the upside and the pair trades above the 50 and 200 4h-SMAs.
Fundamentally, it all depends on the US Consumer Price Index (CPI) report. Core CPI MoM is the most important figure, and it is expected to rise by 0.3%. A small miss with 0.2% would send the pair down, while a beat with 0.4% would send it down. As inflation is trending lower, I expect a miss of 0.2%, which would push USD/JPY down.
USDJPY is highly correlated with US yields, which have risen lately, and may decline if inflation continues falling. Even if the Core CPI MoM comes out at 0.3%, a decline in the YoY outcome could weigh on the pair after the dust settles. All in all, the upside in USD/JPY may re
