Yen edges higher on inflation figures but near-term action is still directionless
The USDJPY dipped after Tokyo core inflation rose above expectations in January, increasing pressure on Bank of Japan to start phasing out its ultra-loose policy.
Near-term price action holds in a sideways mode, ranging around 130 level for the fifth straight day and on track to fail again to register a weekly close above 130 that would add to signals that recovery leg from 127.22 (Jan 16 low) was limited (capped by falling 20DMA) keeping larger bearish structure intact.
Technical studies on daily chart are bearish, with minor support from 10DMA (129.39), keeping the downside at risk.
Weekly close below 10DMA would further weaken near-term structure and open way for attack at key supports at 127.58/22 (cracked Fibo 61.8% of 112.53/151.94 / Jan 16 low), loss of which would signal continuation of larger downtrend.
Conversely, sustained break through pivotal 130.00/37 barriers (psychological / 20DMA), would improve near-term outlook and open way for fresh recovery.
Res: 130.00; 130.36; 131.12; 131.57
Sup: 129.39; 128.34; 127.58; 127.15