Market update: US dollar hits decade high against yen after inflation surge
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Earlier this month, Fed Chair Powell downplayed concerns about inflation during a speech at the Stanford Business, Government, and Society Forum. However, three consecutive months of hotter-than-expected CPI figures may prompt a reassessment of the policy outlook.
This could potentially lead to more hawkish rhetoric in the upcoming days and weeks – a bullish outcome for the US dollar.
While the greenback may consolidate to the upside in the near term, it is uncertain whether it can continue to appreciate relentlessly against the yen, as Japanese authorities may soon step in to support the domestic currency, with USD/JPY trading at levels not seen in nearly 34 years.
USD/JPY technical analysis
USD/JPY blasted past resistance at 152.00 on Wednesday, hitting its strongest mark since June 1990. If Tokyo doesn’t ramp up verbal intervention or move in quickly to contain the yen’s decline, speculators may feel emboldened to initiate an attack on the upper boundary of a medium-term ascending channel located near 155.70.
On the flip side, if prices turn lower and head back below 152.00, a possible support area emerges at 150.90. Bulls are likely to vigorously defend this area; failure to do so could spark a retracement towards the 50-day simple moving average at 150.00. Below this threshold, all eyes will be on channel support near 149.25.
USD/JPY price action chart
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This article was originally published by a www.ig.com . Read the Original article here. .