- SWFX market sentiment is 58% bearish (-3%)
- 56% of pending orders in the 100-pip range are to SELL the Greenback
- Notable resistance around 111.60
- Upcoming events: US CPI m/m, US Core CPI m/m, US Core Retail Sales m/m, US Retail Sales m/m
The US producer prices decreased for the first time in more than a year in December, due to falling services costs. .
The Labour Department stated that the country's PPI slipped 0.1% in the reported month, putting the yearly producer price inflation increase to 2.6% after rising 3.1% in November. Despite the weak correlation between consumer and producer prices, they underline the challenge for the Federal Reserve to reach its 2% inflation goal.
US fundamentals in focus
Four sets of important fundamentals from the US are scheduled for 1330GMT today, namely, the (Core) Consumer Price Index and (Core) Retail Sales for the month of December.
USD/JPY falls to 38.2% Fibo at 111.17
Due to overall weakening of the Dollar triggered by the negative US PPI release and the ECB Minutes, the currency rate began moving downwards and was stopped only at the weekly S3, which is located slightly below the 38.2% Fibonacci retracement level. It should be noted that in the process the pair has formed minor descending channel.In order to recover and reach the opposite side of this pattern, the rate would need to cross a combination of the monthly S1, weekly S2 and the 55-hour SMA. From this perspective, the Yen most probably will continue to gain value against buck. However, the above retracement level still remains strong support barrier especially on daily timeframe.
In addition to that, the southern side is backed by the three-month low located at the 110.84 mark.
Hourly chart
The US Dollar continues to weaken against the Yen for the fifth consecutive session. As a result, it fell down to a November low of 111.10. It is likely that the pair ends this session in the red area; however, in case no surprises occur in the market, losses should be limited.
Meanwhile, technical indicators signal to a possible recovery during next week. It is, however, yet unclear if the expected upward movement is to occur already on Monday.
Daily chart
The bearish SWFX market sentiment has slightly weakened today with 58% short positions (-3%). Meanwhile, 56% of pending orders are to buy the Greenback (-2%).
The market sentiment of OANDA traders is increasingly bullish with 60% long positions (+4%), thus they have been able to increase long positions by 10% during the past two sessions. Saxo Bank clients are likewise bullish, as 58% of open positions are long (+3%).