USD/JPY eased toward 162.00 at Thursday’s European open, holding marginal losses as the pair coiled into a triangle pattern. Softer US inflation data cooled bets on near-term Fed rate cuts and pressured the Dollar, while the Yen struggled to gain ground.
The US Dollar carried marginal losses against the Japanese Yen at Thursday’s European session open, approaching the 162.00 area as recent price action traced a sequence of lower highs and higher lows. That squeeze has drawn the pair into a triangle pattern.
Softer US data trims Fed rate-cut bets
US figures released this week dampened hopes of immediate Federal Reserve rate cuts and sent the Dollar moderately lower against its main peers. The move set the backdrop for the pair’s grind toward 162.00.
On Wednesday, the US Producer Prices Index showed an unexpected contraction in June, reinforcing the disinflationary signal from Tuesday’s consumer inflation reading. Together, the prints practically confirm the Fed will hold policy unchanged at its July meeting.
The Yen, however, found little traction. Bulls stayed subdued amid caution over the war in Iran, which is pushing Oil prices higher, and growing doubts about the Japanese Finance Ministry’s plans to repatriate pension fund investments.
Triangle keeps traders waiting for direction
USD/JPY traded at 162.16 with a bullish near-term bias intact, yet momentum offered no clear signal. The four-hour Relative Strength Index (14) hovered near the 50 midline, while the MACD stayed slightly negative, hinting at slowing bullish momentum rather than outright exhaustion.
The bottom of the triangle sits at 161.90, with further targets at the July 10 lows near 161.30 and the pattern’s bearish objective at 160.49, the July 3 low. On the topside, the triangle top and the July 13 and 15 highs between 162.40 and 162.50 guard the path to the 40-year high at 162.84. Beyond that, the 127.2% Fibonacci retracement of the early July pullback at 163.50 emerges as a plausible target.
Source: FXStreet
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