By ForexTime
Consumer prices slowed to 2.4% in December from 2.6% in the previous month. The core which excludes fresh food and energy prices cooled to 3.5% – its fourth consecutive month of decline. This data is likely to encourage the BoJ to retain its negative rates this month.
According to Thomas Bulkowski, in his book “Encyclopaedia of Chart Patterns”, this kind of double bottom pattern, (Adam and Adam) has
Worthy of note is the neckline crosses across a confluence of significant support levels which include.
At the time of writing USDJPY is bouncing off the 200-day EMA
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The next key fundamental driver that may influence the currency pair will be the US Consumer Price Inflation data (CPI) due on Thursday. Headline inflation is expected to have ticked higher in December, while the annual core inflation is seen cooling to 3.8%. More signs of cooling inflationary pressures may stimulate Fed cut bets, weakening the USD as a result. USDJPY may remain range-bound as it waits for an injection of fresh volatility.
If the neckline is not broken, USDJPY may rally for about 280 pips and contend with the following key resistance levels ahead.
However, if the Yen’s strength continues after the latest inflation data from Japan, we may see the confluence of key support levels give way.
The following levels may provide a temporary pause as it aims for new lows below the December 28th low of 140.29.
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