USD/JPY challenges highs post-CPI, 110.00 back on the radar

The upside momentum in the greenback has gathered pace after the release of US data, pushing USD/JPY to fresh daily highs near 109.40.

USD/JPY bid on US data, Yellen

The pair has climbed to the area of daily highs around 109.40 after US inflation figures tracked by the CPI rose more than expected 0.4% on a monthly basis durng last month and 1.6% YoY, up from September’s readings.

Further upbeat data saw Housing Starts and Building Permits beating consensus during October, increasing to 1,323M (the highest raise since 1982) and 1,229M, respectively, while the Philly Fed Manufacturing Survey missed estimates at 7.6 for the current month.

On the US labour market, Initial Claims rose by 235K WoW, the lowest level in 43 years, taking the 4-Week Average to 253.50K from 260.00K.

Spot is extending its rebound after bottoming out in the 108.60/50 band in early trade, trading at shouting distance from yesterday’s multi-month tops in the vicinity of 109.80.

Adding to the now better tone in the pair, Chairwoman J.Yellen argued that a rate hike could be appropriate ‘relatively soon’.

USD/JPY levels to consider

As of writing the pair is advancing 0.46% at 109.58 and a break above 109.77 (high Nov.16) would aim for 111.45 (high May 30) and finally 111.92 (high Apr.25). On the other hand, the immediate support lines up at 108.56 (low Nov.17) followed by 107.78 (low Nov.15) and then 106.33 (200-day sma).

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