USD/JPY Price Lacking Bullish Conviction Near 144.0, Eyes on CPI

• Activating the flag pattern indicates more gains.
• A new lower low invalidates the upside scenario.
• Returning above the median line (ml) signals a larger upward movement.

The USD/JPY price dropped slightly in the short term as the US dollar remained under pressure. The pair is trading at 144.07 at the time of writing. The outlook seems neutral, with no directional bias.

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The greenback was in a short correction even though the US NFP, Average Hourly Earnings, and Unemployment Rate came in better than expected. Yesterday, the US Consumer Credit Came in at 23.8B, above the 8.9B expected.

Today, the Tokyo Core CPI reported a 2.1% growth, matching expectations, while Household Spending dropped by 2.9%, exceeding the 2.2% drop expected.

Later, the US will release the trade balance indicator, which is expected to be at -64.9B versus -64.3B in the previous reporting period.

The US dollar depreciated a little, but it could take the lead again as the US Consumer Price Index m/m and CPI y/y may announce higher inflation in December versus November.

The inflation figures should drive the markets on Thursday. The FED is expected to cut the Federal Funds Rate in 2024, but higher inflation could postpone such decisions.

USD/JPY Price Technical Analysis: 50% Fibonacci as Key Support

The USD/JPY price developed a minor flag pattern. The bias remains bullish in the short term as long as it stays above the 50% Fibonacci line of the ascending pitchfork. An upside breakout and activating the flag formation indicate an upside continuation.

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Still, only coming back above the median line (ml) and making a new higher high validates larger growth. On the contrary, taking out the 50% Fibonacci line and making a new lower low confirms more declines.

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• Source: https://www.forexcrunch.com/blog/2024/01/09/usd-jpy-price-lacking-bullish-conviction-near-144-0-eyes-on-cpi/