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Forex: USD/JPY back at highs, focus on US CPI

FXstreet.com (Barcelona) - The USD/JPY eased back to the 96.00 level ahead of the European session and rose to 96.25 for the release of EMU CPI data, then taking profits back to 96.10/20 range.

EMU CPI rose 0.4% as expected in February, retracing part of the -1.0% drop, with annualized data easing from 2.0% to 1.8%, also in line with consensus. Core data stayed at 1.3% (YoY). Labor cost eased from 1.8% (revised from 2.0%) to 1.3% in Q4.

US macro data will be the main focus: “The USD has been able to benefit from positive US data recently, so today’s motto is: the higher the numbers, the better for the greenback. In addition to the Empire State Index and the University of Michigan’s consumer confidence this also applies for industrial production and consumer prices”, wrote TD Securities analysts, pointing to higher prices as signal of an improving economy. “We expect to see data slightly above consensus and thus further support for USD”, they added.

UBS analysts are bullish: “There is scope for further strength in the near-term. A break above 96.71 would open 97.79 and then 99.87”, wrote analyst Gareth Berry, pointing to support at 95.45 ahead of 94.48.

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