FxWirePro: USD/JPY hits 2-month high, resilient economic data and hawkish rate repricing boost dollar

Chart - Courtesy Trading View 

Spot Analysis:

USD/JPY was trading 0.59% higher on the day at 134.72 at around 04:50 GMT.

Previous Week's High/ Low: 132.90/ 129.79

Previous Session's High/ Low: 134.46/ 133.60

Fundamental Overview:

The U.S. dollar firmed across the board on Thursday, bolstered by stronger-than-expected producer prices and falling jobless claims data.

Data released overnight showed US Producer Price Index (PPI) for January was up 0.7% MoM after declining 0.2% in December.

Meanwhile, US Initial Jobless Claims for the week ended February 10th, unexpectedly fell to 194,000, compared to the 200,000 expected and 195,000 prior.

Upbeat figures hinted that the Federal Reserve would have to maintain its inflation-fighting interest rate hikes for longer.

Interest rate futures market now shows US rates could peak close to 5.25% by July before dropping to 5.0% by the end of the year.

Technical Analysis:

- USD/JPY trades shy of 110-EMA at 134.86

- Momentum is bullish and volatility is high and rising

- Price action is extending gains into daily cloud

- MACD and ADX support upside in the pair

Major Support and Resistance Levels:

Support - 133.65 (5-DMA), Resistance - 134.86 (110-EMA)

Summary: USD/JPY trades with a bullish technical bias. The pair is on track to test 200-DMA at 136.90. Immediate resistance is seen at 110-EMA at 134.86. Break above will fuel upside.