USD/JPY Hits 147.78 on Strong US GDP, Contrasts with Japan’s CPI

A price level of roughly 147.78 indicates that, as of January 26th, the USD/JPY pair is trading with a bullish bias. The most recent U.S. economic data release supports this trend because the advanced GDP quarterly growth rate exceeded expectations, coming in at 3.3% as opposed to the predicted 2.0%.

The data, which reflects a more robust U.S. economy, has strengthened the U.S. dollar, contributing to the pair’s uptrend. The positive GDP figures signal a resilient economic momentum despite a slight deceleration from the previous quarter’s 4.9%, and this vigour in the U.S. economy is translating into upward pressure on the USD/JPY exchange rate.

Conversely, Japanese economic data released at 3:30 indicates a Tokyo Core CPI year-on-year increase of 1.6%, which is lower than the predicted 1.9% and the previous 2.1%. The softer inflation numbers from Japan suggest a less aggressive stance from the Bank of Japan regarding tightening, contrasting with the robust economic expansion in the U.S.

This divergence in economic health between the two nations further bolsters the bullish sentiment surrounding the [USD/JPY], as traders may anticipate a continued disparity in monetary policy approaches, adding strength to the U.S. dollar against the Japanese yen.

USD/JPY Technical Outlook

The [USD/JPY] pair is currently trading at around 147.769 and is close to the pivot point, indicated by the green line at 147.700. This level is critical as it represents the equilibrium point between bulls and bears, a price at which the pair could potentially pivot its direction.

Just above this pivot point, we observe the resistance levels that could pose challenges for upward movements: the first is at 148.500, the second at 148.803, and the third at 148.776. These thresholds may act as barriers where selling pressure intensifies.

On the downside, support levels lie beneath the pivot point, with immediate support at 147.300. If this level gives way, the pair may seek further support at the Fibonacci retracement levels of 147.103 and 146.578.

The Relative Strength Index (RSI), positioned at 52, indicates neither overbought nor oversold conditions, suggesting there is room for movement in either direction without immediate pressure from momentum traders.

USD/JPY Live Chart