USD/JPY Rises Post-US CPI, Eyes Resistance As Bulls Remain In Charge

Following the Asia close on Monday, USD/JPY retraced to the day's lows ahead of the US CPI release, mainly due to USD weakness as traders positioned themselves for the data, hitting daily lows of 149.30.

• USDJPY has sustained an upward grind post-US CPI, hovering just below the initial resistance at 150.78, the November 17 high. This marks a 0.95% intraday advance, propelled primarily by yield differentials in the wake of robust US inflation figures. Now comfortably above the psychological 150.00 level and approaching last year's highs, market participants may exercise caution, anticipating potential verbal warnings from the Ministry of Finance, given the impressive 7% advance this year.
• The overall trend remains bullish, with the recent breach of key resistance at 148.80 (Jan 19 high) confirming a resumption of the uptrend that began in late December. This maintains a sequence of higher highs and higher lows. Above this level, attention turns to 151.43, the November 16 high, inching closer to the multi-decade highs at 151.95.
• Key short-term technical levels to the downside are unchanged at 145.90, the Feb 1 low, while initial support lies at 147.74, the 20-day EMA. On the upside, initial resistance stands at 150.78. A break and hold above this level could signal a move towards 151.43, the Nov 16 highs.
• Looking ahead, Japan is set to sell 10-year Climate Transition Bonds later today. Additionally, market participants await GDP and Industrial Production data scheduled for release on Thursday