The USD/JPY rate has plummeted down to the 111.20 level.
The rate had finally reached the lower trend line of a dominant ascending pattern, which was keeping the rate from declining.
The Bureau of Labor Statistics released US PPI data that came out lower-than-expected of 0.1% compare to forecasted 0.2%. Note, the US Core PPI was released at the same time with the US PPI.
"The Producer Price Index for final demand edged up 0.1 percent in February, seasonally adjusted," the U.S. Bureau of Labor Statistics announced today and added: "Final demand prices fell 0.1 percent in both January and December. On an unadjusted basis, the final demand index moved up 1.9 percent for the 12 months ended in February."
FOMC on Wednesday for the USD/JPY
This week will be busy for fundamental announcement traders. Both the central banks and various statistics offices are set to make various announcements.On Wednesday, at 09:30 GMT the UK Consumer Price Index will be released. This data release also is expected to be ignored by the markets due to the Brexit politics.
On the same day, at 18:00 GMT the Federal Reserve will publish their FOMC Statement, Economic Projections and the Federal Funds Rate. Moreover, the event will be followed by the FOMC Press Conference.
This event is above all else during this week, as the FOMC sets the value of the US Dollar. In general, the rest of the world's central banks just adapt to the Federal Reserve.
On Thursday, all attention will be on the UK events. At 09:30 GMT the UK Retail Sales will be published. Afterwards, at 12:00 GMT the Bank of England will announce their official Bank Rate and Monetary Policy Summary. The BoE in general is expected to react to the recent Brexit developments and the Federal Reserve.
On Friday, there will be two notable data releases. At 08:30 GMT the German Markit PMIs will be released. They are expected to cause a significant impact on the EUR pairs.
The last event of the week will be the Canadian CPI and Core Retail Sales release at 12:30 GMT.
For more information watch this week's economic calendar analysis stream.
USD/JPY short term daily review
During Monday's trading session, the currency exchange rate passed the support level of the 200-hour simple moving average to end the trading session at 111.20. On Tuesday morning, the rate was trading sideways at the 111.28 mark.In regards to the near-term future, it is expected that the rate will break the pattern line at the 111.21 mark. In this case, most likely, the rate will end the trading session at the 111.00 level.
However, the pattern line at the 111.21 mark could support the rate to push it to the 111.40 level.
Hourly Chart
On the daily chart, the rate has passed the support of the 100 and 200-day simple moving averages.The previously mentioned trend line is the only technical level standing in the way of a decline down to the 111.00 level.
Daily chart
Trader open position volume on the Swiss Foreign Exchange was short on Monday. 63% of the volume was short on USD/JPY.
By the middle of Tuesday's trading session the sentiment was 60% short.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell. Namely, 52% of orders were short.