USDJPY drops after US inflation data


Inflation is running hot in the US, and today's data confirmed that trend, sending the greenback lower against most of the major peers. 

The USDJPY pair is now testing previous highs near 109.25, and if this level is taken out, we could see a larger correction toward 108.40, where the last important support is seen.

Moreover, there is a short-term uptrend line in the 109.20 region, further reinforcing that support zone. 

Should the greenback decline below 108.40, the medium-term outlook could change to bearish again, targeting the 105 level.

Alternatively, the resistance could be near 109.70, and if bulls push the USD above that level, further rally toward 110 might occur. 
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