• USDJPY in upside mode, eyes first US CPI after Trump's election
• UK GDP data to slow down as GBPUSD eases
• Japan GDP may be the key data to drive USDJPY lower

US CPI --> US 500

The US CPI data for October, which is coming out on Wednesday, is the initial post-election test for rate reduction bets after Trump’s victory in the US elections in the previous week. September's headline CPI decreased to 2.4% y/y; however, it is anticipated to increase to 2.6% y/y. It is expected that the core consumer price index will stay unchanged at 3.3%. A lower-than-anticipated CPI could result in corrections in the dollar, while higher-than-anticipated data could prolong the greenback's favorable trend, potentially hurting Wall Street.

The US 500 cash index increased to another record peak above the 6,000 psychological mark on Monday, posting the seventh green day in a row. The index added almost 6% following the rebound off the 5,720 support level, with the next crucial resistance coming from the 161.8% Fibonacci extension level of the down leg from 5,720 to 5,115 at 6,100. On the other hand, a move down could meet the previous peak at 5,926. Technical oscillators confirm the bullish structure.

UK GDP --> GBPUSD

If UK growth in the third quarter is faster than expected, the BoE's likelihood of cutting interest rates more quickly in the coming months will decrease. This could help the pound recover some of its recent losses against the dollar. GDP growth is predicted to tick lower to 0.2% from 0.5% q/q.

GBPUSD has struggled within a tight range of 1.2840-1.3045 over the last month, remaining above the long-term uptrend line and, more importantly, above the 200-day simple moving average (SMA). A move to the upside could battle with the 1.3045-1.3100 resistance zone. Alternatively, the 1.2840 support and the 200-day simple moving average (SMA) at 1.2820 may halt steeper bearish movements. A successful dive below them could pave the way for a test of 1.2670, thereby changing the outlook to bearish.

Japan GDP --> USDJPY

The yen may experience a modest increase if Japan’s Q3 GDP numbers are better than anticipated on Friday. Uncertainty regarding the Bank of Japan's rate hike path is the primary factor contributing to the yen's decline. Significant improvements in inflation and growth data are required to reinforce earlier rate hike expectations.

Following the US elections, the yen's losses since mid-September intensified, culminating in a three-month high of 154.68. Currently, USDJPY is developing beneath the previous peak, but the 200-day SMA is acting as a significant support level for traders. A jump above the recent high could drive the bulls until the 158.85 barrier. However, a decline below the key area of 151.30 could pave the way for a challenge to the short-term rising trend line near the 149.15 barrier. The MACD and RSI indicators exhibit conflicting signals in the near-term outlook.