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USD/JPY Fails to Rise Above Support Despite Inflation Reaching Target

By Baruch Spier
15 May 2014 13:51 GMT

Talking Points:

  • US inflation reaches the Fed’s 2.0% goal for the first time in 9-months
  • Initial jobless claims falls to a 7-year low
  • USD/JPY fails to rise significantly above support

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Actual

Expected

Prior

Revised Prior

US CPI MoM (APR)

0.3%

0.3%

0.2%

US CPI YoY (APR)

2.0%

2.0%

1.5%

US CPI Ex Food and Energy MoM (APR)

0.2%

0.1%

0.2%

US CPI Ex Food and Energy YoY (APR)

1.8%

1.7%

1.7%

US Initial Jobless Claims (MAY 10)

297K

320K

319K

321K

US Continuing Claims (MAY 3)

2667K

2690K

2685K

2676K

Annual changes in consumer prices rose to meet the Federal Reserve’s inflation target for the first time in 9-months, but the April Consumer Price Index did not beat expectations and therefore failed to significantly push USD/JPY above support. Also announced on Thursday morning, Initial Jobless Claims fell to a seven year low in the week ending on May 10.

Employment and inflation make up the Federal Reserve’s dual mandate guiding monetary policy. In a statement at the end of its April meeting, the Fed said that growth in economic activity had picked up and inflation expectations remained stable. The Fed also said that it will likely remain appropriate to maintain the current rate target for considerable time, meaning that it might take a break of expectations in inflation or employment to significantly change the course of US Dollar trading.

USD/JPY 1-Minute: May 15, 2014

USD/JPY Fails to Rise Above Support Despite Inflation Reaching Target

The US Dollar rose nearly 20 pips against the Japanese Yen following the data announcements, but the pair quickly erased the gains. Senior Technical Strategist Jamie Saettele points out that USD/JPY continues to find support from an upward trendline from February, a break of which would target 99.44.

USD/JPYDaily by Jamie Saettele

USD/JPY Fails to Rise Above Support Despite Inflation Reaching Target

Charts created by Baruch Spier and Jamie Saettele using Marketscope 2.0. Add DailyFX Support/Resistance to your charts at FXCM Apps.

-- Written by Baruch Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .

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15 May 2014 13:51 GMT