USD/JPY confined in tight range ahead of Jackson Hole

The USD/JPY pair extended its range-bound price-action and remained confined in a narrow trading band around 100.50 region. 

The pair had a muted reaction to Japanese CPI data released during early Asian session. Japan's National CPI for July came-in at -0.4% y-o-y, which was in-line with expectations and matched June reading. Meanwhile, core CPI (excluding food and energy) climbed 0.3% in July as compared to previous 0.4%. 

Today's CPI release provided little impetus to the major as the readings were in-line with BoJ's estimates during its July monetary policy meeting and hence, negates the possibilities of an immediate stimulus expansion by the central bank.

Moving forward, today's speech from the Fed Chair Janet Yellen at Jackson Hole symposium would be key determinant for the greenback's near-term direction and might provide the required momentum that could assist the pair to break through the recent trading range. 

Also in focus would be the first revision of US GDP growth for the second quarter of 2016.

Technical levels to watch

On the upside, 100.65-70 zone might continue to attract some selling pressure, which if absorbed should assist the pair through 101.00 handle, towards 101.20-25 resistance area. A sustained move above 101.20-25 resistance now seems to pave way for continuation of the recovery trend towards its next major resistance near 102.20 region.

Meanwhile on the downside, 100.20 level now seems to have emerged as immediate support, which is closely followed by 100.00 psychological mark important support. A convincing break below 100.00 psychological mark might turn the pair vulnerable to break through multi-week lows support near 99.55 level and head towards retesting Brexit swing low near 99.00 round figure mark.