USD/JPY Price Analysis: Remains lackluster below 140.00, Japan’s Inflation in focus

The USD/JPY pair is demonstrating topsy-turvy moves below the round-level resistance of 140.00 in the London session. The asset is struggling to find a decisive move as investors need guidance about the interest rate decision from the Federal Reserve (Fed) and the Bank of Japan (BoJ), which will be announced next week.

S&P500 futures have generated some losses ahead of New York's opening, portraying a cautious market mood. The US Dollar Index (DXY) has rebounded firmly and is aiming to recapture the previous day’s high of 100.53.

Going forward, Japan’s inflation report for June will be in focus, which will be published on Friday. As per the consensus, the headline Consumer Price Index (CPI) increased to 3.5% vs. the former release of 3.2%. Core inflation that excludes volatile oil and food prices softened marginally to 4.2% against the prior release of 4.3%.

USD/JPY has rebounded after testing the breakout of the Ascending Triangle chart pattern formed on a two-hour scale. A breakout of the aforementioned chart pattern results in wider ticks and heavy volume. The 20-period Exponential Moving Average (EMA) at 139.42 is providing a cushion to the US Dollar bulls.

Meanwhile, the Relative Strength Index (RSI) (14) is attempting a break into the bullish range of 60.00-80.00. An occurrence of the same will activate the bullish momentum.

For an upside move, a decisive break above July 19 high around 140.00 would drive the asset towards June 15 high at 141.50 followed by July 10 high at 143.00.

On the flip side, a downside move below July 18 low of 137.68 would expose the asset to May 17 low at 136.30 and May 12 low at 134.40.

USD/JPY two-hour chart