USD/JPY PRICE ANALYSIS: POSSIBLY IN A SWEET SPOT FOR SELLERS
- USD/JPY rebounds into a key resistance zone after the release of stickier-than-expected US CPI data.
- The pair has hit a tough ceiling where two major moving averages converge.
- USD/JPY is at risk of rolling over and continuing its short-term downtrend.
USD/JPY rebounds after the release of higher-than-forecast US Consumer Price Index (CPI) data for February. The data increases the probability the Federal Reserve will retain interest rates at their current relatively high levels for longer. Higher interest rates are a positive for a currency since they result in higher capital inflows.
USD/JPY has rallied off of the data and run into a substantial resistance zone made up of two major moving averages: the 50 (red) and 100-day (blue) Simple Moving Averages (SMA). Given the overall short-term trend is bearish and still assumed intact, the pullback could provide sellers with the perfect opportunity to short the currency pair.
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