Key Points
- The US Dollar traded higher against the Japanese yen until it found sellers near 118.65.
- There is a bullish trend line formed on the hourly chart of USDJPY, which the pair is currently attempting to break.
- Recently, the US Consumer Price Index was released by the US Bureau of Labor Statistics.
- The result was in line with the forecast, as there was a rise of 1.7% in Nov 2016, compared with Nov 2015.
USDJPY Technical Analysis
The US Dollar rocketed higher after the fed announced a rate hike from 0.5% to 0.75%. The USDJPY pair traded above the 118.00 level to challenge the 118.65 resistance where the US Dollar sellers appeared.
The pair started a downside move, and currently attempting to break a bullish trend line formed on the hourly chart. If sellers succeed in a close below the trend line, then a move towards the 38.2% Fib retracement level of the last wave from the 114.77 low to 118.65 high is possible at 117.16.
One may even consider selling with a break using a tight stop of around 20-25 pips.
US Consumer Price Index
Recently in the US, the Consumer Price Index was released by the US Bureau of Labor Statistics. The market was aligned for an increase of 1.7% in the price movements by the comparison between the retail prices of a representative shopping basket of goods and services in Nov 2016, compared with Nov 2015.
The result was in line with the forecast, as there was a rise of 1.7% in Nov 2016. The report added that the “shelter and gasoline indexes continued to rise in November, and were again the main reasons for the seasonally adjusted all items increase. The shelter index advanced 0.3 percent in November, while the gasoline index increased 2.7 percent”.
Overall, the US Dollar started facing sellers after the result, and it looks like may trim gains, which happened post the fed decision.
