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Author: Amar – Technical Analyst

USD/JPY rebounds from fresh weekly lows around 114.41 despite a slump in global stock prices and new data releases from the US economy could generate a bigger exchange rate rebound, as the inflation indicator is expected to rise for the Federal Reserve. fifth consecutive month. Currently, the USD/JPY is fluctuating around 115.5060 during the Asian session this morning after the biggest daily jump in three weeks. The yen pair dropped to the lowest since February 03 early on Wednesday before bouncing off near 114.40. While Russia’s invasion triggered the initial flight-to-safety, hawkish comments from Fed and upbeat US data seem to have added to the USD’s strength and called back the USD/JPY bulls.

The price is now retraced all of the declines from the Asian session and is up to test at 115.600. The 38.2% retracement is also in the area at 115.141. The high price from yesterday reached 115.200, which now has been broken and consolidated again. So, there is a lot of topside resistance between 115.140 and 115.230. As a result, there could be sellers against the area with stops on a break of 115.23. All the area and a move back toward 114.926, the closest support which would be eyed.

With that said, USD/JPY may stage another attempt to break out of the opening range for 2022 as it reverses ahead of the monthly low, and the update to the US PCE Price Index may push the exchange rate to fresh yearly highs as evidence of persistent inflation puts pressure on the FOMC to adjust its exit strategy.