Despite the decline in U.S. CPI, should we be wary of the direction of the U.S. dollar against the yen?

Despite the decline in U.S. CPI, should we be wary of the direction of the U.S. dollar against the yen?

13.03.2025

In the U.S. currency market yesterday, the U.S. dollar rose against the yen despite the fact that the U.S. February Consumer Price Index (CPI), released yesterday, fell by 0.2 percentage points year-over-year from the previous month’s 3.0% to 2.8%. The USD/JPY pair recovered from 147.583 to 147.180.It broke above the resistance level of the 200-period simple moving average (SMA) on the hourly chart. On the 4-hour chart, the RSI rose from 42 to 63. On the daily chart, a rebound has occurred after touching the -2σ line of the Bollinger Bands.

Among European currencies, the euro rose against the U.S. dollar. The EUR/USD pair climbed from 1.0875 to 1.0929. Price action was seen moving above the 20-period moving average (MA) on the hourly chart. On the 4-hour chart, the uptrend continues, supported by the 20-period MA, and on the daily chart, the pair has risen for three consecutive days. We will need to watch for any potential correction in the euro heading into the weekend.

Today’s economic indicators include UK RICS house prices at 9:01, Swiss producer import prices at 16:30, Eurozone industrial production at 19:00, and Canadian housing permits at 21:30,U.S. Initial Jobless Claims and U.S. Producer Price Index at 9:30 PM, U.S. Weekly Natural Gas Inventories at 11:30 PM, U.S. 30-Year Treasury Auction at 2:00 AM, remarks by German Bundesbank President Nagel at 2:30 AM, and New Zealand Manufacturing PMI at 6:30 AM the following day. We should pay close attention to the direction of the U.S. dollar against the yen, even as U.S. CPI declines.