FxWirePro: USD/JPY remains bid amid improved risk sentiment, focus on U.S. CPI data for further impetus

USD/JPY chart on Trading View used for analysis

• USD/JPY trades 0.14% higher on the day at 110.615 at 0300 GMT, risk-on in Asian markets supports.
   
• The pair is holding break above 55-EMA with scope for test of 200-DMA at 111.27.
   
• Technicals are turning slightly positive on the intraday charts. RSI is above 50 and biased higher. Stochs are bullish and MACD supports upside.
   
• The Bureau of Labor Statistics will publish its Consumer Price index for January later today at 8:30 am EST, 13:30 GMT.
   
• Core CPI is expected to rise 0.2% in January with the annual rate slipping to 2.1% from 2.2%.  
   
• Overall inflation is predicted to decline 0.1% in January with annual price changes dropping to 1.6% from 1.9% in December.
   
• A miss on expectations will justify the Fed’s pause and the potential for second half rate hikes will become that much smaller, weighing on the dollar.
   
• Immediate resistance is seen at 110-EMA at 110.94. Break above targets 200-DMA at 111.26.
   
• On the flipside, 21-EMA is strong support. Break below will negate any bullish bias.

Support levels - 110.41 (55-EMA), 110.19 (5-DMA), 109.83 (21-EMA)

Resistance levels - 110.77 (61.8% Fib), 110.94 (110-EMA), 111.27 (200-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-USD-JPY-extends-bullish-momentum-hits-7-week-highs-at-11065-1496518) is progressing well.

Recommendation: Hold for targets.

For details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.