USD/JPY Seeks Direction Ahead of US CPI, Continues to Search for Direction【February 13, 2024】

Fundamental Analysis

• ECB officials reaffirm rate cut path, temporarily driving EUR/USD sales.
• The Israeli military conducts airstrikes in Rafah, causing tension in the Middle East as neighboring countries react.
• Attention is on the US Consumer Price Index to see if inflation control is reflected in the figures.

USDJPY Technical Analysis

Analyzing the daily chart of USD/JPY, which is trading at 149.40 JPY, showing a slight strength in the dollar. The recent resistance line is at 148.48 JPY, corresponding to the 61.8% Fibonacci expansion level, and whether it will break through is a point of focus.
Today, the US CPI is scheduled for release, attracting significant market attention. If inflation control is confirmed, expectations for a rate cut may increase, potentially leading to a stronger yen. However, if inflation is not under control, it could be a surprising factor, leading to a rapid increase in the dollar’s value, possibly entering the 150 JPY range.

It is advised to watch the market until NY time.

Day Trading Strategy (1-Hour Chart)

Analyzing the 1-hour chart of USD/JPY, where the Ichimoku Kinko Hyo baseline and cloud are providing support. On the other hand, the resistance line at 148.48 JPY, a daily Fibonacci level, has been functioning as resistance since last Friday, with a chance to break through triggered by today’s CPI.
Inflation expectations from the NY Fed are decreasing, and signs of inflation control are seen in other indicators. Today’s US CPI is expected at 2.9%, with the FRB also focusing on whether it will be in the 2% range, which is crucial. If it’s in the 3.0% range, expectations for a rate cut could be delayed, making the dollar likely to strengthen.

The strategy until NY time today is to focus on short-term trading and maintain a no-position stance at the time of the CPI announcement, following the CPI result.

Support and Resistance Lines

Upcoming significant support and resistance lines:

149.48 JPY: Major resistance line

Market Sentiment

USDJPY Sell: 73% Buy: 27%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.