**USD/JPY & AUD/USD Outlook: Navigating Range Volatility Amid US Inflation Data**
*Based on the article by Manish Jaradi, Forex Factory, with supplementary insights for expanded analysis.*
The global currency markets continue to grapple with key economic data releases and central bank policy signals, which are shaping near-term momentum and longer-term trends. In particular, traders are monitoring the USD/JPY and AUD/USD pairs closely, given both technical setups and fundamental drivers like US inflation figures, central bank meetings, and shifting risk sentiment.
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## Key Factors Driving Recent Volatility
### US Inflation Data
The release of the US Consumer Price Index (CPI) has significantly influenced global forex sentiment, with traders parsing headline and underlying inflation figures for clues about the Federal Reserve’s next policy moves.
– **April Core CPI**: Rose 0.3 percent on a monthly basis, matching consensus expectations.
– **Annual Headline Inflation**: Moderated to 3.4 percent, in line with forecasts.
– **Market Reaction**: The data was viewed as neither hot enough to push the Fed toward a hike nor cool enough to accelerate potential rate cuts.
### Federal Reserve Policy
Recent statements from Federal Reserve officials have emphasized a data-dependent approach to rate movements.
– **Fed Stance**: The FOMC has signaled patience, keeping options open for rate reductions later in the year, dependent on inflation returning toward the target.
– **Market Pricing**: Traders are betting on the possibility of two 25-basis point cuts in 2024, but expectations may adjust quickly as new data emerges.
### Global Risk Sentiment and Cross-Asset Flows
– **US Treasury Yields**: Bond yields pulled back after the inflation print, providing relief for risk-sensitive assets.
– **Equity Rally**: A cooling of rate hike fears has helped equities rebound, supporting high-beta currencies like the AUD.
– **Geopolitical Developments**: Persistent tensions in Asia and the Middle East continue to add a layer of uncertainty.
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## USD/JPY: Consolidation Phase but Risks Remain Tilted Higher
USD/JPY remains a focal point for traders given involvement from both fundamental and policy factors. The pair’s movements in recent months have been shaped by diverging policy paths between the Bank of Japan (BOJ) and the Fed, as well as direct intervention risks from Japanese authorities.
### Technical Analysis
**Short-Term Trends**
– **Price Action**: After hitting a 34-year high above 160 recently, USD/JPY experienced sharp swings following suspected interventions by Japanese officials. The pair has since settled into a more consolidative range.
– **Support and Resistance**:
– *Key Support*: 152.00-153.00 zone, where prior interventions were likely triggered.
– *Immediate Resistance*: 156.30 area, a recent range ceiling.
**Indicators**
– **Daily Momentum**: RSI and MACD suggest reduced upward momentum,
Read more on AUD/USD trading.