In general, the pair is still heading higher as stated before. Meanwhile, note that the hourly chart has been fully reviewed.
The reason for that is the breaking of various descending patterns.
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."
Empty trading week for USD/JPY
On Thursday, main attention of fundamental event traders will be on the ECB Rate Announcement at 12:45 GMT. The volatility on the EUR charts usually increases during the ECB Press Conference, which will start at 13:30 GMT.Meanwhile, oil traders will most likely catch a one percent move at 15:30 GMT. The data release has been providing moves of more than one percent during the last month and a half.
USD/JPY short term daily review
During the previous trading session, the currency exchange rate broke the previously drawn pattern. Due to the fact, the chart was corrected!In regards to the near-term future, most likely, the currency exchange rate will be trading towards the weekly R1 at 110.46 to end the trading session at the 110.00 level. Moreover, the 55-hour and the 100-hour simple moving averages will support the surge during the day.
On the other hand, the round level of 110.00 could retrace the currency exchange rate to move back to end the trading session at the 109.80 level.
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
Since Tuesday, traders were short on the USD/JPY. Namely, 54% of open positions on the Swiss Foreign Exchange were short.
On Thursday it changed, as 59% of open positions were short by the middle of the day's trading.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were almost neutral. 51% of pending orders were set to buy on Thursday.
Traders are expecting the rate to retrace downwards after the recent surge. Meanwhile, they don't have their stop losses and take profits close by. That is indicated by the neutral pending order proportion.