Yen depreciation resumes, Euro and Pound test critical level – Analysis and Forecast – January 12, 2024

Towards the end of the current 5-day trading period, we can see continued sluggish flat action in most currency pairs. So the Pound/USD pair is trading near last week’s high of 1.2770, the Euro/USD pair is trying to get closer to the psychological level of 1.1000, and the commodity currencies are also stuck in a narrow flat channel. However, the US dollar/yen pair paints a slightly different picture. After last Friday’s decline, buyers found support at 143.40, pushing the price up more than 100 points in just one day. We will see if the pair can maintain its bullish momentum today following the release of US inflation data.

US dollar/yen

Negative fundamental data from Japan released this week contributed to a resumption of the yen’s decline. Accordingly, the household expenditure index in November recorded -2.9%, below the forecast of -2.3%. In Japan, total employee income in the form of wages also decreased by 0.2% to 1.5% over the same period. As a result of these data, the price almost tested last week’s high of 146.00. If buyers strengthen the pair above the mentioned levels, the price may continue to rise towards 147.00-148.00. A downside analysis of the 144.00-143.00 range could lead to a decline to the December extremes of 140.80-140.30.

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