Action Insight Daily Report 2-13-23

Dollar Rises as Focus Turns to CPI This Week, Yen Down ahead of BoJ Nomination

Dollar rises broadly in Asian session as helped by mild risk aversion. Nikkei hits a 2-week love as heavyweight technology stocks slip. Yen softens at the same time, after a former staff of the top runner for BoJ Governor Kazuo Ueda said he's neither hawkish nor dovish, but data dependent. Kiwi and Euro are following the greenback as next stronger. Canadian and Swiss Franc follow Yen as next weakest. Overall, much volatility is expected in the week with BoJ Governor hearing in parliament, US and UK CPI data.

Technically, CAD/JPY looks ready to resume the choppy recovery from 94.61. Break of 98.84 resistance will bring stronger rise to 38.2% retracement of 110.87 to 94.61 at 100.82, even as a corrective move. The development, if happens, should be accompanied by break of 132.89 resistance in USD/JPY. A question is whether EUR/JPY and GBP/JPY would follow by breaking through 147.79 and 161.80 respectively.

In Asia, at the time of writing, Nikkei is down -1.05%. Hong Kong HSI is down -0.47%. China Shanghai SSE is up 0.53%. Singapore Strait Times is down -0.75%. Japan 10-year JGB yield is up 0.0083 at 0.499.

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USD/JPY Daily Outlook

Daily Pivots: (S1) 130.21; (P) 131.04; (R1) 132.28; More...

USD/JPY's break of 131.88 minor resistance suggests that pull back from 132.89 has completed at 129.79 already. Intraday bias is back on the upside for 132.89 first. Break there will resume whole rebound from 127.20. Further rally should then be seen to 38.2% retracement of 151.93 to 127.20 at 136.64, even as a correction to the decline from 151.39. For now, further rally is in favor as long as 129.79 support holds, in case of retreat.

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