On Wednesday, the USD/JPY surged, as it had bounced off the lower trend line of a medium scale pattern and broke through the resistance provided by the upper border of a smaller scale channel down pattern.
In general, from the technical trend analysis Dukascopy Analytics deduct that the rate will continue to surge.
The Bureau of Labor Statistics released US PPI data that came out lower-than-expected of 0.1% compare to forecasted 0.2%. Note, 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 February, seasonally adjusted," the U.S. Bureau of Labor Statistics announced today and added: "Final demand prices fell 0.1 percent in both January and December. On an unadjusted basis, the final demand index moved up 1.9 percent for the 12 months ended in February."
FOMC on Wednesday for the USD/JPY
This week will be busy for fundamental announcement traders. Both the central banks and various statistics offices are set to make various announcements.On Wednesday, at 18:00 GMT the Federal Reserve will publish their FOMC Statement, Economic Projections and the Federal Funds Rate. Moreover, the event will be followed by the FOMC Press Conference.
This event is above all else during this week, as the FOMC sets the value of the US Dollar. In general, the rest of the world's central banks just adapt to the Federal Reserve.
On Thursday, all attention will be on the UK events. At 09:30 GMT the UK Retail Sales will be published. Afterwards, at 12:00 GMT the Bank of England will announce their official Bank Rate and Monetary Policy Summary. The BoE in general is expected to react to the recent Brexit developments and the Federal Reserve.
On Friday, there will be two notable data releases. At 08:30 GMT the German Markit PMIs will be released. They are expected to cause a significant impact on the EUR pairs.
The last event of the week will be the Canadian CPI and Core Retail Sales release at 12:30 GMT.
For more information watch this week's economic calendar analysis stream.
USD/JPY short term daily review
During Tuesday's trading session, the support levels of the 55-hour SMA together with the weekly pivot point at 111.42 pushed the currency exchange rate to break the resistance level of the 100-hour SMA. On Wednesday morning, the rate was supported by the 100-hour SMA to be located at the 111.57 mark.In regards to the near-term future, most likely, the 100-hour SMA will continue to support the rate for the rest of the trading session. It is expected that the rate might end the day at the 111.80 level.
On the other hand, today's US Federal Funds Rate, FOMC Statement release at 18:00 GMT might push the rate to pass through most of the technical indicators to the bottom boundary of the pattern line at 111.30 mark.
Hourly Chart
On the daily chart, the ascending dominant pattern can be observed better.In general, if the pattern manages to push the rate even higher, the USD/JPY could reach for the 112.30 level during the next week.
Daily chart
Trader open position volume on the Swiss Foreign Exchange was short on Monday. 63% of the volume was short on USD/JPY.
By the middle of Wednesday's trading the sentiment was 59% short.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell. Namely, 54% of orders were short.