USD/JPY directionless below 104.00 handle ahead of US CPI

The USD/JPY pair was seen struggling for a firm direction, swung between tepid gains and minor losses around 104.00 handle.

Currently trading around 103.90-95 region, the pair has failed to benefit from prevalent risk-on mood in European equity market, which tends to dent the safe-haven appeal for traditional safe-haven assets - like the Japanese Yen. Dimming prospects of an eventual Fed rate-hike action is weighing on the US Dollar across the board and restricting any fresh buying interest around the major.

Next in focus would be US CPI print for the month of September, later during NA session. Consensus estimates point to a m-o-m rise of 0.3%, taking the yearly reading to 1.5% closer to Fed's 2% target. 

Technical outlook

Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd., notes, "Bullish daily studies and daily Ichimoku cloud underpin bulls, however, several attempts to close above 140.43 pivot (Fibo 61.8% of 107.47/99.52), were so far without results. This signals that the pair may spent more time in consolidation above daily cloud, before resuming higher.  Firm break above recent high at 104.62 is expected to open targets at 105.00 and 105.60."

"However, alternative scenario of recovery stall is still in play, with negative signals requiring sustained break below daily cloud top at 103.50."