On Tuesday, the USD/JPY traded sideways between the 109.40 and 109.50 levels. Although, the range was increasing by the middle of the day.
For guidance of the future direction of the rate take into account that there is a strong technical resistance cluster at the 109.60 level and a solo support at 109.30.
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
As it is accustomed, the third week of the month is expected to be rather empty for macroeconomic data releases. Although, there are a couple of releases to look forward to this week.On Tuesday, the UK Average Earnings Index was published at 09:30 GMT. The results of the event can be seen by clicking the link below.
On Wednesday, look forward to the Canadian Retail Sales data release at 13:30 GMT. This event most likely will be the only one notable enough during the rest of the week to be traded by currency release traders.
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 Tuesday's morning hours, the currency exchange rate was trading between the 55-hour and the 100-hour simple moving averages at the 109.40 mark.Most likely, the US Dollar will depreciate against the Japanese Yen to 109.00, passing the support levels of the weekly pivot point at 109.22 and the 100-hour simple moving average.
On the other hand, the US Dollar could take the support of the weekly pivot point and the 100-hour simple moving average to appreciate against the Japanese Yen to the 50.00% Fibo at 109.60.
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 Tuesday, traders were short on the USD/JPY. Namely, 54% of open positions on the Swiss Foreign Exchange were short.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were bullish. 57% of orders in that range were set to buy.