USD/JPY Extends Bearish Series, RSI Dips Back Into Oversold Territory

USD/JPY remains under pressure following a series of lackluster U.S. data prints, and the pair remains at risk for further losses as it extends the bearish sequence from earlier this week.

Updates to the U.S. Consumer Price Index (CPI) have sparked a mixed reaction in dollar-yen even as the headline and core rate of inflation unexpectedly held steady in January, and the recent slowdown in Retail Sales appears to be dampening the appeal of the greenback as the fresh data prints stoke fears of stagflation.

Bear in mind, signs of sticky price growth may keep the Federal Open Market Committee (FOMC) on course to deliver a March rate-hike, but central bank officials may start to project a more shallow path for the benchmark interest rate in an effort to combat the weakness in private-sector consumption, one of the leading drivers of growth.

With that said, downside targets remain on the radar for the remainder of the week, with the pair at risk for further losses ahead of the FOMC interest rate decision on March 21 as the bearish momentum appears to be gathering pace.

USD/JPY Daily Chart

GBP/USD pares the decline from the previous week following the bullish reaction to the U.K. Consumer Price Index (CPI), and another batch of positive data prints may generate a more meaningful advance in the pound-dollar exchange rate as it puts pressure on the Bank of England (BoE) to raise the benchmark interest rate sooner rather than later.