USDJPY below the 200 day MA and 38.2% retracement
The USDJPY is trading toward the low for the day after an up and down run after the data dump at 8:30 AM. The key was the PCE inflation data.
Inflation in the US is clearly trending lower. The market is chatting about the shorter term 3-6 month trends, but going forward the Core PCE MoM will rid itself of 0.4%, 0.5% and 0.4% (1.3% of gains) over the next 3 months going back 1-year. If the trend of softer data persists (i.e. 0.1% numbers?),the core PCE will start to melt further away toward the 2.0% target.
Looking at the daily chart, the pair is trading below the 38.2% of the 2023 range at 142.474. The price is also below the 200 day MA at 142.75. Those levels are key barometers on the daily chart that will tilt the bias down or up going forward. Admittedly, the price action has seen moves above and below the level over the last week or two, but yesterday’s decline stayed below and today is too.
On the downside, the swing area between 140.93 and 141.54 is the next hurdle to get to and through. Below that engineers will start to look toward the 50% midpoint at 139.59.