The surge of the USD/JPY is set to once more test the resistance of the 110.00 level. Besides the fact that this level has proven itself as a psychological resistance, there are no other obstacles to the USD/JPY to reach the 110.50 mark.
Meanwhile take into account that the rate is supported by the 55 and 100-hour simple moving averages near the 109.60 level.
The Bureau of Labor Statistics released US PPI data lower-than-expected of negative 0.2% compared with forecasted 0.01%. Note, that the US Core PPI was released at the same time with the US PPI.
The Bureau of Labor Statistics said in a note, "Lower energy prices sent the producer price index (PPI) down 0.2% in December. Prices for services ticked down 0.1%, but are up 2.8% over the past year—the strongest pace this expansion. The sharp drop in oil prices over the fourth quarter has pulled down energy input costs for a second straight month."
The week's releases have ended
The week's macroeconomic data releases are over. Meanwhile take into account that there will be no data releases that are worth covering also on Monday.Instead watch the weekly Economic Calendar Analysis stream at 12:00 GMT on Monday. During the stream the whole week's calendar will be laid out to the participants.
USD/JPY short term daily review
During Friday's morning hours, the currency exchange rate was located at the 109.85 mark.In regards to the near-term future, most likely, the rate will keep surging upwards to the 110.00 level. Besides, the 55-hour simple moving average will support the rate during the day.
Moreover, the Dukascopy Analyst team predicts, that the rate might surge to the 111.00 level next week.
Hourly Chart
On the daily chart it can be observed that the pair faces no long term resistance as high as the 110.50 level where the weekly R1 is located at.Most likely a lone resistance level will be passed and the rate will surge upwards to a strong resistance cluster at 111.00.
The resistance cluster was made up of the monthly PP, weekly R2 and the 200-day simple moving average. Moreover, the 55 and 100-day simple moving averages were approaching from the upper levels to strengthen the 111.00 mark.
Daily chart
On Thursday, traders were short on the USD/JPY in 59% of cases on the Swiss Foreign Exchange. By the middle of Friday only 53% of positions were short.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were set to buy. 57% of pending orders were set to buy on Friday.
Traders have closed their short positions, as they have observed that a retracement downwards will not occur. Instead, the rate is heading higher.