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   “¢   Reviving safe-haven demand underpins JPY and exerts some pressure at higher levels.
   “¢   Headline/core CPI unexpectedly ticks down in February and fails to lend any support.

   “¢   The downside remains limited amid a goodish pickup in the US Treasury bond yields.

The USD/JPY pair extended its steady intraday decline and dropped to the lower end of its daily trading range, around the 111.20-15 region post-US CPI.

The pair failed to capitalize on its early uptick to the very important 200-day SMA, around mid-111.00s and started losing ground in wake of reviving safe-haven demand. A modest pull-back in equity markets, triggered by fresh Brexit jitters, underpinned the Japanese Yen’s relative safe-haven demand and turned out to be one of the key factors exerting some downward pressure.

Adding to this, the prevalent US Dollar weakness, further weighed down by softer US consumer inflation figures, further collaborated to the pair’s intraday retracement slide. In fact, the headline CPI came in to show a 0.2% m/m rise in February, while the yearly rate eased further to 1.5% during the reported month.

This coupled with a downtick in the core reading, coming in at 2.1% y/y rate as against 2.% previous and expected, also did little to lend any support, albeit a goodish pickup in the prevalent positive tone around the US Treasury bond yields, extended some support and helped limit deeper losses, at least for the time being.

With today’s key US macro data out of the way, the broader market risk-sentiment and the USD price dynamics might continue to act as key determinants of the pair’s momentum ahead of the Fed Governor Lael Brainard’s scheduled speech later during the US trading session.

Technical outlook

Valeria Bednarik, FXStreet’s own American Chief Analyst explains: “The pair is short-term neutral according to readings in the 4 hours chart as the price is barely holding above its 100 SMA at around 111.10, while the RSI turned back south, currently sliding at around 46.”

“The Momentum indicator in the mentioned chart lags by heading north above its 100 level,  rather reflecting the pre-Brexit news momentum than anticipating further gains ahead. The bearish potential will increase on a break below 110.85, where bulls rejected declines earlier this week,” she added further.