- The Swiss traders are 67% bearish on the USD/JPY
- Trader pending orders in the 100-pip range are 52% to sell the pair
- The rate is plummeting down, passing most support levels
The USD/JPY is declining as expected. Although, the fall of the pair is much larger that it could have been forecast. By the middle of the day's trading session on Tuesday the pair was already located at the 112.50 level.
Latest Fundamental Event
The Bureau of Labor Statistics released US PPI data better-than-expected of 0.1% compared with forecasted 0.00%. Note, that 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 November, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.6 percent in October and 0.2 percent in September. On an unadjusted basis, the final demand index moved up 2.5 percent for the 12 months ended in November.
USD/JPY will be influenced by US data this week
Until Wednesday there are no notable data releases scheduled to occur that might impact any of the major pairs or gold.On Wednesday, the macroeconomic data releases will start at 09:30 GMT with the UK Consumer Price Index. The event is expected to cause at least a 20 base point move.
On the same day at 13:30 GMT the Canadian will publish the Consumer Price Index data sets. During the last half a year the data release has caused fluctuations of at least 40 pips.
Afterwards at 19:00 GMT the event of the week will take place. Namely, the FOMC Statement and the Federal Funds Rate will be published. The Federal Reserve is expected to hike the US central banks interest rate to 2.5% from 2.25%.
In theory the event is expected to cause a US Dollar surge, which would beat the top pairs downwards. This year the interest rate hikes have caused moves of at least 40 base points.
On Thursday, all attention will be paid to events in the UK. Namely, at 09:30 GMT the UK Retail Sales are expected to cause a move from 10 to 40 pips.
Afterwards, the Bank of England will announce their rate decision. The event has caused moves from 26 to 97 pips since May 2018.
On Friday the data releases will continue. During the morning hours, namely, at 09:30 GMT the UK Current Account will be published. This event causes moves from 15 to 45 pips.
The week's data will end at 13:30 GMT. At that time the Canadian Retail Sales and GDP data will be published. Simultaneously the US Durable Goods data sets and Final GDP will be released.
The last event is too complex to explain it shortly. Instead, state your questions at the weekly Monday's economic calendar stream at 12:00 GMT.
The above mentioned data release will be covered by Dukascopy Analytics. The event can be watched on our YouTube channel.
USD/JPY short term daily review
During the previous day trading session, the US Dollar depreciated against the Japanese Yen by 102 pips or 0.90% and was luckily stopped by the ascending dominant pattern line at 112.50 mark.Most likely, the US Dollar will appreciate against the Japanese Yen to trade near the 61.80% Fibonacci retracement level at the 112.72 mark.
On the other hand, the rate could pass the support of the descending dominant pattern line to trade towards the 50.00% Fibonacci retracement level at the 112.16 mark.
Hourly Chart
On the daily chart the rate is declining after encountering a resistance line that can be measured by connecting the high levels of the second part of 2018.
In addition, note that the 55-day SMA did not manage to stop the decline. Meanwhile, the 100-day SMA was holding its ground near the 112.35 level. It managed to force the currency exchange rate into a rebound at the start of December.
Daily chart
On Tuesday, the short sentiment on the pair decreased, as some had taken profits from their short positions. Namely, 67% of traders were short, compared to 72% on Monday.
Meanwhile, trader set up pending orders, stop losses, take profits and position open orders in the 100-pip range were set to buy the USD/JPY in 62% of cases on Monday.
By the middle of Tuesday the orders were almost neutral, as only 53% were set to sell.