FxWirePro: USD/JPY extends weakness below 21-EMA, hits fresh 3-week low below 109 handle

USD/JPY chart - Trading View 

USD/JPY was trading 0.15% lower on the day at 108.89 at around 04:50 GMT, edging slightly higher from session lows at 108.75.

The pair is extending weakness below 21-EMA and has hit fresh 3-week low below 109 handle. 

Data released overnight showed U.S. Consumer prices rise more than expected, but failed to impress USD bulls. 

The consumer price index rose 0.6% in March from the previous month and 2.6% from a year ago, according to the Department of Labor. A surge in gasoline prices contributed for about half the gain.

Markets showed a modest reaction to the news. While the inflation numbers look high, many economists as well as Fed policymakers expect the increase to be temporary.

"The report is the clearest indication so far that the signs of mounting inflation evident in business surveys and producer prices are feeding through to stronger consumer prices,” said Michael Pearce, senior economist at Capital Economics. 

Technical indicators for the pair have turned bearish. Price action has slipped below 21-EMA and bearish 5-DMA crossover on 20-DMA adds to the bearish bias.

Price action is now hovering around 200W MA support at 108.96. Break below will drag the pair lower.