On Monday, the USD/JPY currency exchange rate was aiming to reach the 110.00 level.
Meanwhile, take into account that, if the pair passes the 110.00 level it will face a technical resistance level near the 110.20 mark.
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."
Bank of England and Canadian employment
There are various minor data releases scheduled for this week, which are unlikely going to influence the financial markets. However, there is one event that is set to take all attention and cause a reaction.The major event will be the Bank of England rate announcement on Thursday. The rate announcement and the results of the central bank's monetary policy vote will be published at 12:00 GMT.
Another notable event during this week will be the Canadian Employment data release on Friday at 13:30 GMT.
Both of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
USD/JPY short term daily review
During Friday's trading session, the currency exchange rate broke through the resistance levels of the simple moving averages to end the trading day at 109.40. On Monday morning, the rate broke the 50.00% Fibonacci retracement level to trade at the 109.88 mark.In regards to the near-term future, most likely, the rate will break the descending dominant pattern line at the 110.35 mark to surge towards the 111.00 level.
On the other hand, the descending dominant pattern line could retrace the rate at the 110.35 mark to push the US Dollar to trade near the weekly R1 at 110.01.
Hourly Chart
The descending pattern can be better observed on the daily chart. Take into account that the pattern is non-traditional, as the support line is drawn by using previous year's high levels and the recent low level.In addition, the new weekly pivot points are blocking the pair from surging up to the resistance cluster near the 111.00 level.
Watch the resistances near the 110.00, 110.50 and 111.00 levels. Around these levels there is likely going to be action.
Daily chart
After the recent sharp surge traders have opened short positions. Namely, on the Swiss Foreign Exchange 57% of trader open positions are short.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were set to buy. 54% of trader pending orders are set to sell in the mentioned range.