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USD/JPY forex signal - US Monthly Inflation - 14 Feb 2018

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The United States Bureau of Economic affairs will be releasing the monthly inflation report covering the period of January today at 13:30 GMT. According to the economists polled, consumer prices in the U.S. are forecast to bring a mixed picture.

Headline CPI is expected to rise 0.3% on the month in January while core CPI, which excludes the volatile food and energy components is expected to rise 0.2% on the month.

Core CPI is expected to rise at a slower pace while headline consumer price index is expected to rise a bit rapidly. The data puts the annual CPI and core CPI to ease back from December's rise. This means that consumer prices could still remain below the 2% inflation target rate.

With the markets now taking the Federal Reserve seriously and the fact that investors expect inflation to start rising soon, a weak print could potentially dent the sentiment. Although the Fed uses the Core PCE price index as the main gauge of inflation, the headline CPI will shed light on whether there are any inflationary factors or not.

Besides the inflation data, retail sales figures will also be coming out at the same time. Retail sales are forecast to rise 0.5% on the headline and 0.2% on the retail sales that excludes autos.

Today's forex signal is USDJPY, the currency pair was seen weakening in yesterday's trading session as price posted new lows falling to one-year low. The declines came on the back of broader market sentiment. However, the sharp declines are expected to result in price posting a rebound.

Therefore, we are looking to go long at 107.20, targeting 108.20 where resistance is likely to be retested. The upside bias will be invalidated in case USDJPY closes below 106.82.

forex signal usdjpy 14 feb 2018

Disclaimer: The article is written for informative purposes only and it is not financial advice. The author does not have any position in the currency pairs mentioned, and no plans to initiate a position. He wrote the article himself and expressed his own opinions. Readers should not treat any opinion expressed by the author as a specific inducement to make a particular trade or follow a particular strategy, but only as an expression of his opinion. All risks and coasts associated with online trading are your responsibility.