FxWirePro: USD/JPY breaks trendline resistance, hits highest since Nov 1 as investors ramp up rate hike bets

USD/JPY chart - Courtesy Trading View 

USD/JPY was trading 0.15% higher on the day at 114.22 at around 05:20 GMT, extending gains for the 3rd straight session.

The major has broken above strong trendline resistance at 114.12 raising scope for further gains.

Dollar was set for its best week in five months as investors raise Fed rate hike bets amid higher-than-expected inflation.

U.S. inflation data released on Wednesday showed that the US CPI grew 6.2% y/y and 0.9% m/m in October, while the core CPI rose 4.6% y/y and 0.6% m/m.

Investors are now pricing the first rate hike by July 2022 and another by December of that year, according to Reuters data.

Focus now on inflation readings from a University of Michigan survey, along with JOLTS job openings data later in the day for further impetus.

New York Fed President John Williams is scheduled to speak at an online conference, which could provide clues to the Fed’s reaction to high inflation.

Major Support Levels: 

S1: 114.12 (Trendline)

S2: 113.64 (converged 200H MA and 5-DMA

Major Resistance Levels: 

R1: 114.53 (76.4% Fib)

R2: 114.60 (Upper BB)

Summary: USD/JPY intraday bias has turned bullish, scope for further gains. Watch out for break above 114.75 for upside continuation.