USD/JPY Rose Amid U.S Treasury Rebound, Awaiting CPI

Fundamental Analysis

* Cautious Mood: The Japanese Yen has weakened against the US Dollar as deteriorating market sentiment and a rebound in U.S. Treasury yields weigh on the currency. Investors remain cautious about making significant bets while awaiting Wednesday’s U.S. Consumer Price Index (CPI) report. The inflation data is expected to highlight the challenges of reaching the Federal Reserve’s 2% target, with consumer prices projected to rise to a 2.7% annual rate in November from 2.6% in October, while core inflation is anticipated to hold steady at 3.3%. These figures are unlikely to alter expectations of a Fed rate cut next week but may indicate a more measured approach to monetary easing in 2025. Meanwhile, adverse risk sentiment has supported a recovery in U.S. Treasury yields, with the benchmark 10-year yield inching up to 4.23% from 4.13%, further widening the gap with Japanese Government Bonds (JGBs) and adding bearish pressure on the Yen.

Technical Analysis

* Technical Breakout: USDJPY was traded higher following recent breakout above the resistance level 151.750. MACD which illustrate bullish bias signals suggest the pair to likely further extend its gains,

* Resistance and Support: If the bullish momentum persists, there’s a strong likelihood that the price will potentially head towards the level 153.550. Conversely, a potential reversal is also to be expected and the price could head back towards 149.550 after it breach back below the level 151.750.

Understand how technical analysis can help you in this trading opportunity.

Potential Risks

Looking ahead, traders will keep a close attention to critical U.S. economic indicators, including the upcoming CPI and PPI reports, which are expected to provide further clues on market direction.

Know how to manage trading risks with risk management strategies.

Monitoring

Stay updated on US and Japan data, central bank updates and any shifts in the US Dollar’s strength by following PU Prime’s market insights and daily financial news.

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Disclaimer: Trading derivatives involves high risks, and market conditions can change rapidly. The content is for informational purposes only and should not be considered as financial advice. Traders should conduct their own research and consider risk management strategies.