After declining on Wednesday, the USD/JPY on Thursday was back up at the resistance of the 55-hour simple moving average and upper trend line of a descending channel pattern.
Meanwhile, the rate was trading in limbo around the weekly S1 at 111.10.
The Bureau of Labor Statistics released US CPI data that came better than expected of 0.4% compare with forecasted 0.3%. Note, that the US Core CPI was released at the same time with the US CPI.
The data release caused a minor, but still notable reaction on the USD/JPY charts. Namely, the rate surged by 11 pips before retreating back down.
US PPI ends the week
On Thursday, the week's events will end with the US Producers Price Index publication at 12:30 GMT. This event on average causes moves around 10 base points.All events are covered by Dukascopy Analytics. The covers of events and the weekly economic calendar review can be watched on the Dukascopy Webinars channel.
USD/JPY short term daily review
By the middle of Thursday's trading session the USD/JPY was once more testing the resistance of the 55-hour simple moving average and an upper trend line of a channel down pattern.The rate was most likely going to bounce off the resistance and resume its decline. Note that in this scenario the weekly S1 at 111.10 would then strengthen the two previously mentioned resistance levels.
On the other hand, watch for a surprise breaking of the pattern. In the case of the rate reaching above 111.20, it would target the 100 and 200-hour simple moving averages near 111.30.
Hourly Chart
The daily chart reveals additional information about the rate. Namely, the pair has the support of the 100-day simple moving average at the 110.90 level.Meanwhile, the 200-day simple moving average was strengthening the resistance of the 111.50 level.
Daily chart
Since Monday, traders were short on the USD/JPY, as 66% of total open position volume on the Swiss Foreign Exchange was in short positions.
By the middle of Thursday's trading session the sentiment had become 68% short.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were no longer bullish. 58% of orders were set to sell on Thursday.