USD/JPY has reached above the target of 112.00. Namely, during Friday's trading session the currency exchange rate reached a monthly pivot point at 112.11.
On Monday, the currency pair was consolidating its gains by slightly retreating down.
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.
Watch the Economic Calendar analysis
This week has notable data releases that will both cause significant moves in various currency pairs and be covered by Dukascopy Analytics.During Monday's trading session this week's Economic Calendar Overview video will be published. In that you can take a look at the scheduled data releases and ask questions in the comments.
Data releases will start on Tuesday. On that day the UK Average Earnings Index will be published at 08:30 GMT.
On Wednesday, the UK Consumer Price Index will be released at 08:30 GMT. Afterwards, at 12:30 the Canadian CPI and Trade Balance will be released. This is expected to cause the biggest impact during this week.
The data flow will end on Thursday. The European Manufacturing PMIs will be released at 07:15 GMT and 07:30 GMT. Dukascopy Analytics will cover the 07:30 GMT, as at that time the German PMI will be published. The German data causes the biggest reaction on EUR pairs.
An hour later, at 08:30 GMT, the UK Retail Sales will be published.
Last but not least, the Canadian and US Retail Sales will be published at 12:30 GMT. Both data sets combined could cause a move on the USD/CAD of up to 30 pips.
Meanwhile, check out previous data release covers and economic calendar analysis on the Dukascopy Webinars YouTube channel.
USD/JPY short term daily review
At the end of last week, the USD/JPY currency pair traded sideways around the psychological level at 112.00.Note, that the pair is trading near the upper boundary of the long-term descending channel at 112.15, thus, theoretically, it is unlikely, that some bullish momentum could prevail in the market.
On the one hand, the exchange rate could trade sideways around the given level, trying to breach the given channel.
On the other hand, the rate could reverse south and step lower to the support level formed by the 55-hour SMA and the weekly PP at 111.66.
Hourly Chart
On the daily chart there is a technical reason for the surge. The 100-day simple moving average together with the monthly PP at 110.90 provided the needed support.Initially they stopped the decline of the USD/JPY on Wednesday. On Thursday, the support levels caused a surge.
Meanwhile, the 200-day simple moving average and at 111.47 failed to pause the jump of the currency exchange rate.
Daily chart
On Friday, on the Swiss Foreign Exchange 69% of all open position volume was short.
On Monday, 72% of open position volume was short. It could be explained by bulls taking profits from the recent surge.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were neutral. Namely, 51% of orders were set to buy.