US CPI data is headline news for today. The market has slowed down recently with traders unwilling to make bets before the numbers are released. According to latest forecasts, the core inflation rate is expected to print at 1.8% y/y, unchanged from the prior month. However, US economic news-flow has increasingly tended to outperformed relative to consensus forecasts since mid-May, leaving the door open for an upside surprise.
In our view, a developing Triangle pattern in USD/JPY offers favourable trading opportunities. If wave ((d)) top is taken to the upside, we expect the price to continue higher to 124.90-125.00 area. If we see a break to the downside below 124.19, alternative count would be given preference, and the price is likely to slide to 123.41 and possibly 123.13.