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USDJPY – Are We Headed to 108.00
Today’s PPI data came in weak at 1.9% versus 2.2% eyed suggesting that there are absolutely no price pressures in the US economy and making the prospect of another Fed hike appear remote. The news weighed on USDJPY and pushed the pair below the key 109.50 support level creating fresh technical damage to the chart.
Tomorrow’s CPI data could also miss its mark and add further downside pressure to the pair as US benchmark 10-year yields drift towards the 2% level. Inflation -- or rather the absolute absence of it -- remains the key barrier to any further tightening by the Fed and is the primary reason for dollars doleful performance. If the CPI numbers tomorrow miss the pair may be headed to long term support at the 108.00 level