#USDJPY @ 135.157 US inflation slows more than expected in November. (Pivot Orderbook analysis)

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• US inflation slows more than expected in November.
• Japanese yen soars across the board following the report.
• USD/JPY drops below 135.00 to one –week lows.

The pair currently trades last at 135.157.

The previous day high was 137.85 while the previous day low was 136.45. The daily 38.2% Fib levels comes at 137.31, expected to provide resistance. Similarly, the daily 61.8% fib level is at 136.98, expected to provide resistance.

The USD/JPY collapsed after the release of US inflation data. The pair dropped from 137.60 to as low as 134.60, reaching the lowest level in a week and approaching the multi-month low of 133.58.

The US Consumer Price Index rose in November by 0.1%, below the 0.3% of market consensus. The annual rate fell from 7.7% to 7.1%, reaching the lowest level in almost a year. Inflation numbers eased expectations about the future path of Fed rate hikes.

Following the numbers the US dollar collapsed across the board and the Japanese Yen soared, boosted by a rally in Treasuries. US bond yields sank with the US 10-year falling from 3.60% to 3.43%. The DXY is falling by 1.15% under 104.00.

On Wednesday, the Federal Reserve will announce its decision on monetary policy. A 50 basis points rate hike is expected. New macroeconomic forecast will be released. Powell will hold a press conference.

USD/JPY looking at the recent low

The sharp decline in USD/JPY damaged significantly the outlook for the Dollar. Price is back under the 200-day Simple Moving Average. Currently is testing the 135.00 area and a break under 134.60 would expose the next support around 134.10. Below attention would turn to the monthly low at 133.60.

Technical Levels: Supports and Resistances

USDJPY currently trading at 134.84 at the time of writing. Pair opened at 137.72 and is trading with a change of -2.09 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 138.31, 50 SMA 143.21, 100 SMA @ 141.1 and 200 SMA @ 135.16.

The previous day high was 137.85 while the previous day low was 136.45. The daily 38.2% Fib levels comes at 137.31, expected to provide resistance. Similarly, the daily 61.8% fib level is at 136.98, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 136.83, 135.94, 135.42
• Pivot resistance is noted at 138.23, 138.74, 139.64

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