Arch Capital Global Chief Economist Parker Ross remarked on the US CPI Report and the Fed rate path, stating,

“Core services inflation (0.31% m/m) – the sticky component the Fed has been worried about – bounced back in July from its weakest monthly reading since 2021.”

The CPI Report shifted the focus to the US labor market data and the US economy. The Fed hawks may have little ground to keep interest rates unchanged if there’s a marked deterioration in labor market conditions.

Short-term Forecast: Bearish

USD/JPY trends will hinge on Japan’s GDP and US economic data. Upbeat GDP numbers from Japan and weaker US data could push the USD/JPY toward 145.

Investors should remain alert. Monitor real-time data, central bank insights, and expert commentary to adjust your trading strategies accordingly. Stay updated with our latest news and analysis to manage USD/JPY volatility.

USD/JPY Price Action

Daily Chart

The USD/JPY hovered well below the 50-day and 200-day EMAs, confirming the bearish price trends.

A USD/JPY breakout from the 148.529 resistance level and the top trend line could signal a move toward 150. Furthermore, a break above 150 could bring the 151.685 resistance level into play.

Economic indicators from Japan and the US require consideration on Thursday.

Conversely, a drop below the 145.891 support level could signal a fall toward the 143.495 support level.

The 14-day RSI at 33.31 suggests a USD/JPY break below 147 before entering oversold territory.