USD/JPY Set To Drop Further If Inflation Softens
USD/JPY
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In the latest financial news, the focus is on the U.S. dollar’s performance ahead of the eagerly anticipated release of the U.S. Consumer Price Index (CPI) data, which has significant implications for future monetary policy decisions. This data release is a critical moment for markets, as it can influence the Federal Reserve’s interest rate decisions. A CPI reading below the anticipated 3.1% could signal weaker inflation pressures, potentially leading to speculations about the Federal Reserve lowering rates in the future. Conversely, a figure exceeding 3.1% might prompt a short-term rally in the dollar as it suggests continuing inflation concerns, possibly deterring immediate rate cuts.
Additionally, the intraday price structure of the dollar reveals potential for fluctuation, guided by the Elliott wave analysis which hints at an ongoing impulsive drop in the USD, with a rally in wave four currently searching for resistance near the 103.00 level. Should this pattern lead to a subsequent drop, it may position the USD/JPY pair as a significant mover, especially in light of speculative shifts between a hawkish Bank of Japan (BOJ) and a potentially dovish Federal Reserve stance.
Today’s CPI data release, set for 13:30 CET, is thus highly anticipated, with market participants closely monitoring for impacts on yield volatility and future Fed rate adjustments.
Grega
