Key Highlights
- The US Dollar after trading as high as 110.95 against the Japanese Yen found offers and declined.
- The USD/JPY pair failed near a major resistance area at 110.90-111.00 and traded below the 100 SMA (H4).
- Germany’s Producer Price Index for July 2017 posted an increase of 0.2% (MoM).
- Today, Canada’s Consumer Price Index for July 2017 will be released, which is forecasted to increase 1.2% (YoY).
USD/JPY Technical Analysis
The US Dollar traded with a bullish bias this week until it found sellers near 111.00 against the Japanese Yen. The USD/JPY pair is trading lower and looks poised to extend declines towards 108.80.
The main reason for failure near 110.90-110.00 was a bearish trend line on the 4-hours chart. The mentioned 111.00 level is also a previous support turned resistance.
The pair declined during the past few sessions, and broke a bullish trend line at 109.88. It also cleared the 100 simple moving average (H4) and the 61.8% Fib retracement level of the last wave from the 108.72 low to 110.94 high.
Therefore, there are high chances of USD/JPY retesting the last swing low of 108.72. On the upside, an initial resistance sits at 109.90. Above 109.90, the next major hurdle for buyers is at 110.30 and the 100 SMA (H4).
Germany’s Producer Price Index
Recently in the Euro Zone, the German Producer Price Index for July 2017 was released by the Statistisches Bundesamt Deutschland. The market was looking for the PPI to remain flat compared with the previous month.
The actual result was above the market expectation, as there was an increase of 0.2% in the index. Looking at the yearly change, the PPI was expected to increase by 2.2%, less than the last +2.4%. However, it came in at 2.3%.
The report pointed out that:
In July 2017 the price indices of all main industrial groups increased compared with July 2016: Prices of non-durable consumer goods rose by 3.7%, prices of intermediate goods by 3.0%. Energy prices rose by 1.9%, though the development of prices of the different energy carriers diverged.
The EUR/USD pair was neutral, and traded in a range above the 1.1700 support. On the upside, the 100 SMA (H4) at 1.1775 is a major resistance for buyers.
