• Long-term, the USD/JPY is neutral-to-upward biased, facing solid resistance at 135.50.
• The USD/JPY hourly chart portrays a 40 pip narrow trading range ahead of Wednesday’s US CPI report.

The USD/JPY is almost flat amidst a calmed North American session ahead of July’s US inflation report, which could shed light on further Federal Reserve tightening in the September meeting. At the time of writing, the USD/JPY is trading at 135.12, slightly up 0.14%.

USD/JPY Price Analysis: Technical outlook

The USD/JPY daily chart portrays the pair as neutral-to-upward biased. In the last couple of days, the pair’s price action faced solid resistance around the 135.50 area, putting a lid on the USD/JPY, while the Relative Strength Index (RSI) at 50.32 sideways illustrates the consolidation in the pair.

If the USD/JPY breaks above 135.50, the next resistance would be the 20-day EMA at 135.83. Once cleared, the next resistance would be the July 28 high at 136.57, followed by 137.00. On the flip side, the USD/JPY first support would be the 50-day EMA at 135.12. Break below will expose the 135.00 figure, followed by the August 5 daily low at 132.52.

USD/JPY Daily chart

From a near-term perspective, the one-hour USD/JPY chart illustrates Tuesday’s price action’s narrow 40 pip range. The 20 and 50-hour EMAs around the 134.95-97 area cement the previously mentioned, signaling that USD/JPY traders remain at bay, waiting for fresh US economic data, namely inflation. Therefore, a break above/below that range would determine the faith of the major.

Upwards, the USD/JPY’s first resistance would be the 135.50 mark. A breach of the latter will expose the July 27 daily high at 136.58, followed by 137.00. Downwards, the USD/JPY’s first support will be the August 8 daily low at 134.75. Once cleared, the next support will be the 200-hour EMA at 133.57.

USD/JPY Hourly chart

USD/JPY Key Technical Levels