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Deepgram, a voice AI technology startup, said Tuesday it has raised $130 million at a $1.3 billion valuation and plans to expand into international markets, launch new models, and make acquisitions.January 13th - According to foreign media reports, as core inflation unexpectedly declined slightly in December, investors rushed to buy US government bonds, causing a sharp drop in US Treasury yields and a sell-off of the US dollar. The US core inflation rate in December was 2.6% year-on-year, failing to accelerate to the predicted 2.7%. While these inflation indicators are unlikely to change expectations that the Federal Reserve will keep interest rates unchanged later this month, they may alleviate concerns that accelerating inflation could delay a new round of rate cuts.January 13th - According to CNBC analysis, the U.S. core consumer price index (CPI) rose less than expected in December, further strengthening market confidence that inflation is cooling as the Federal Reserve considers its next interest rate policy move. Data released Tuesday by the Bureau of Labor Statistics showed that the seasonally adjusted core CPI rose 0.2% month-on-month and 2.6% year-on-year, both 0.1 percentage points lower than market expectations. Overall, both the monthly and year-on-year CPI rates were in line with market expectations. This report indicates to some extent that the pace of price increases is slowing towards the Feds 2% target, but the level remains relatively high. Among the sub-items, housing costs, a key factor with strong inflation stickiness, rose 0.4% month-on-month, becoming the largest single contributor to the CPI increase that month. This category accounts for more than one-third of the CPI and rose 3.2% year-on-year.January 13th - According to Reuters, traders increased their bets on Tuesday that the Federal Reserve might not wait until Fed Chairman Jerome Powells term ends in May to cut interest rates, after the U.S. Bureau of Labor Statistics reported that basic consumer price increases were slightly lower than expected. While traders still believe a June rate cut is the most likely outcome, the latest data projects a 42% probability of a Fed rate cut in April, up from 38% before the data release.January 13th - Market analyst Ira Jersey stated that the reassurance brought by the lack of a substantial surge in US inflation has led to blind optimism in the market and pushed up bond yields. The overall CPI increase of 2.7% year-on-year implies that the core PCE annual rate will be below 2.5%, paving the way for the Federal Reserve to adopt a more dovish stance. While a January rate cut is not considered a certainty, it undoubtedly brings the possibility of a March rate cut under consideration.

The USD/JPY Currency Pair Swings in a 60-Pip Range as Bulls Reclaim 124.00 on a Positive Note

Drake Hampton

Apr 08, 2022 10:07

Tips

  • The USD/JPY is up 1.26 percent this week.

  • The greenback strengthens as investors shrug off geopolitical concerns.

  • Forecast for the USD/JPY Exchange Rate: As bulls, we are leaning upward and are aiming for the YTD high of 125.10.

 

As the Asian Pacific session opens, USD/JPY pair extends its weekly gains on broad US dollar strength. The USD/JPY remains strong at 124.15, after trading in a tight 55-pip range over the last three days as the Eastern Europe conflict between Russia and Ukraine enters its sixth day.

 

Asian market futures continue to trade higher, despite the ongoing Russia-Ukraine confrontation. Contrary to the positive tone of Asian market futures, which point to a stronger open, US equities concluded the afternoon in a divided mood. Investors shrugged aside Russia-Ukraine tensions on Thursday, despite Russian Foreign Minister Sergei Lavrov's complaint that Ukraine's new draft accord submitted to Russia does not meet Russia's demands on Crimea and Donbas. Meanwhile, recent reports indicate that Russia is regrouping soldiers in preparation for another offensive aimed at reclaiming Ukraine's eastern territories, Donetsk and Luhansk.

 

The North American session on Thursday featured Fed speakers, lead by St. Louis Fed President James Bullard, who stated that the Fed is still behind the curve in its efforts to contain inflation. Bullard said that by the second half of the year, he would like to see the Federal Funds Rate (FFR) at 3.5 percent.

 

Later that day, Chicago Fed President Charles Evans indicated that "we (the Fed) will reach neutral by the end of this year or early next."

 

On the Japanese docket, the Current Account for February and Consumer Confidence for March would be the headline economic data releases. On the US front, Wholesale Inventories for February will be released on a monthly basis. 

USD/JPY Forecast: Technical Analysis

The USD/JPY continues bullish, but the average daily range (ADR) has been 55 pips during the last three days. Daily moving averages (DMAs) below the spot price further reinforce the uptrend, and it's worth noting that the 100-DMA at 109.48 is on the verge of crossing over the 200-DMA at 109.60.

 

With that considered, the first resistance level for the USD/JPY would be 124.00. If the latter is breached, the March 29 daily high of 124.30 will be revealed, followed by the year-to-date high of 125.10.


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