USD/JPY bulls sitting at key daily resistance ahead of Fed's Powell

• USD/JPY bulls testing resistance on US dollar strength. 
• US CPI and the Fed are the main focus and driving forces. 

USD/JPY is flat in Tokyo as the price presses against the resistance of the bearish daily impulse following US dollar strength in the New York session. 

USD/JPY was choppy but persistent on the upside with US yields gyrating following the market's reaction to the US Consumer Price Index data that bear expectations. 

USD/JPY ended up 25 pips at 110.65 and sits there currently within a 110.58/69 range.

US CPI rose 0.9% in June (vs 0.5% expected, 0.6% prior), for a 5.4% annual pace – the highest since 2008. The ex-food and energy measure rose 0.9% m/m, 4.5% YoY – the highest since 1991.

Meanwhile, the effect of yields has been explained by analysts at Westpac as follows: ''US treasury yields rose for the third consecutive day following data which showed CPI grew at the fastest pace since 2008, as well as a weak result on the 30yr auction. 2-year government bond yields rose from 0.23% to 0.27%, and 10-year bond yields rose from 1.34% to 1.42%.''

Looking ahead, the markets will be looking to the Federal Reserve's Chair Jerome Powell’s semi-annual testimony to Congress today.

The Chair will be taking questions from the House Financial Services Committee.

''No doubt he will be probed about the June inflation data. The Federal Reserve will also release its Beige Book, providing an update on conditions across the Fed districts,'' analysts at Westpac explained.