USD/JPY Plunges to New 12-Week Lows Ahead of Japanese CPI

The USD/JPY currency pair on Thursday plummeted to trade at a new 12-week low of about 138.063 ahead of Japanese CPI data. The currency pair appears to be trading within a sharply descending channel formation in the 60-min chart.

The pair has now declined to trade several levels below the 100-hour moving average line. As a result, the currency pair is trading deep into the oversold conditions of the 14-hour RSI.

USD/JPY Fundamentals Overview

From a fundamental perspective, the USD/JPY currency pair is trading at the back of a relatively busy period in both markets. On Thursday, Japan’s preliminary Jibun Bank Manufacturing PMI for November missed the expectation of 50.7 with a reading of 49.4. On the other hand, the Services PMI fell short of the expectation of 53.1 with a reading of 50, while the Coincident Index and the Leading Economic Index for September outshone the estimates of 101.1 and 97.4, respectively with 101.4 and 97.5.

In the US, the initial jobless claims for last week missed the expected claim count of 225k with a higher tally of 240k. On the other hand, the Michigan Consumer Sentiment Index for October outshone the expected reading of 55 with a reading of 56.8, while New Home Sales for the period beat the forecast of 0.57 million with a tally of 0.632 million. Durable goods orders for October also outperformed the expected change of 0.4% with a change of 1%, while nondefense capital goods orders ex-aircraft beat 0% with a change of 0.7%.

USD/JPY Technical Analysis (the Daily Chart)

Technically, the USD/JPY currency pair appears to be trading within a sharply descending channel formation in the 60-min chart. This indicates a strong short-term bearish bias in the market sentiment.

Therefore, the bears will be looking to stretch the current declines toward 138.063 or lower to 137.708. On the other hand, the bulls will be targeting short-term profits at about 138.686 or higher at 139.032.

USD/JPY Technical Analysis (the Daily Chart)

In the daily chart, the USD/JPY currency pair appears to be trading within a sharply descending channel formation. This indicates a strong long-term bearish bias in the market sentiment.

Therefore, the bears will be targeting long-term profits at about 136.288 or lower at 134.313. On the other hand, the bulls will be targeting potential rebound profits at about 140.237 or higher at 142.211.

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