- The dollar collapses after the reading of the October CPI in the United States.
- USDJPY falls to lows in more than a month.
- The dollar looks vulnerable to further losses.
The USDJPY lost almost 300 points in a few minutes after the publication of US inflation data. The pair went from being above 146.00 to reaching 143.14, reaching the lowest level since September 23rd.
The annual rate of the US Consumer Price Index fell from 8.2% to 7.7% in October, below the 8.0% market consensus and reaching the lowest level since January. Also the underlying reading showed figures lower than expected.
The inflation reading sent US bond yields sharply lower. The 10-year US bond fell to 3.90% from 4.10%, while the 2-year Treasury yield fell to 4.38% from 4.60%. Stock prices on Wall Street soared. The yen jumped against the dollar and was flat against other currencies, unaffected by risk appetite and supported by lower US yields. Despite already showing heavy losses, the dollar still looks vulnerable.
USDJPY broke the key support zone at 145.00. As long as it is below, the bias should point to the downside. The next strong support is seen around 141.50, with an intermediate zone at 142.60.
Technical levels
Source: Fx Street
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