USD/JPY consolidative around 110.40, US CPI on sight

After climbing to fresh daily tops near 110.70, USD/JPY has receded some ground and is now looking to consolidate in the 110.40 region ahead of US data.

USD/JPY attention to US CPI

Spot is so far reverting a 3-day positive streak, finding strong resistance in the 110.80 area, where coincides the key 55-day sma.

The up move has been in correlation with the rebound in US yields, where the key 10-year benchmark managed to retake the 2.20% handle albeit losing some upside momentum soon afterwards.

The fundamentals behind the up move in both yields and the buck come from the US political scenario, where pressure seems alleviated following news that the tax reform could become law in the next months.

Ahead in the day, USD is expected to stay under scrutiny in light of the publication of August’s inflation figures in the US economy measured by the CPI. Additional data will see the weekly report on initial claims.

USD/JPY levels to consider

As of writing the pair is retreating 0.05% at 110.43 and a break below 110.07 (38.2% Fibo of 114.51-107.32) would aim for 109.92 (low Sep.13) and finally 109.49 (21-day sma). On the upside, the initial hurdle aligns at 110.79 (55-day sma) followed by 110.92 (50% Fibo of 114.51-107.32) and then 111.16 (100-day sma).