The surge of the USD/JPY continues. A 50.00% Fibonacci retracement level at the 109.60 mark was reached by the middle of Friday's trading session.
The Fibo had forced the rate into trading sideways. Although, the sideways trading was consistent with the channel up pattern, which has been active since Tuesday.
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 has ended
There will be no notable data releases left on Friday, as the Canadian CPI was released at 13:30 GMT and created a 30 pip move.USD/JPY short term daily review
During the previous trading session, the US Dollar appreciated against the Japanese Yen by 32 pips or 0.29%, breaking the resistance level of the weekly R1 at the 109.18 mark. On Friday morning, the rate was located at 109.47.In regards to the near-term future, it is expected that the currency exchange rate will be retraced by the upper boundary of the pattern line at the 109.50 mark to trade sideways. Moreover, most likely, the rate will stay at the 109.40 level for the day.
However, the rate could be retraced by the 50.00% Fibo at 109.60 to hit the 109.200 level.
Hourly Chart
On the daily chart the rate has broken free from fluctuating horizontally at the 108.50 level.In general, the pair is on its way to the 200-day SMA at the 111.00 level. In addition, the 200-day SMA was being strengthened by the monthly PP.
Daily chart
On Friday, only 51% of open positions on the SWFX were long on USD/JPY. There are couple of reasons for this proportion.
Throughout the week, as the pair surged, long positions slowly disappeared. Traders step by step took profits.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were also neutral. 53% of orders in that range were set to buy.