Key Highlights
- The US Dollar surged higher this week and broke the 111.40 resistance against the Japanese Yen.
- There is a crucial bullish trend line formed with support at 111.20 on the daily chart of USD/JPY.
- The US CPI in June 2018 increased 0.1%, less than the forecast of +0.2%.
- Today in the US, the PPI figure for June 2018 will be released, which is forecasted to increase 0.2% (MoM)
USDJPY Technical Analysis
The US Dollar started a major uptrend from the 108.10 swing low against the Japanese Yen. The USD/JPY pair broke the 111.40 and 112.00 resistances recently and it could move towards 113.50.
Looking at the daily chart, the pair formed a support base above 108.00 this past month and started an upward move. The pair jumped above the 110.00 resistance and settled above the 200-day simple moving average (green).
There was also a break above the 76.4% Fib retracement level of the last decline from the 111.39 high to 108.10 low. It opened the doors for a new high above 111.39 and the pair surged above the 112.00 resistance.
It even moved above the 1.236 Fib extension level of the last decline from the 111.39 high to 108.10 low. Therefore, the last target for buyers may perhaps be the 113.40 resistance. It is close to the 1.618 Fib extension level of the last decline from the 111.39 high to 108.10 low.
On the downside, the broken resistance at 111.40 could act as a support. There is also a crucial bullish trend line formed with support at 111.20 on the same chart.
Recently in the US, the CPI report for June 2018 was released. The market was looking for an increase of 0.2% in the CPI compared with the previous month. However, June’s CPI in the US increased 0.1%.
In terms of the yearly change, the CPI increased 2.9%, in line with the forecast and more than the last 2.8%. The report stated that:
The food index increased 0.2 percent in June, with the indexes for food at home and food away from home both rising 0.2 percent. Despite a 0.5-percent increase in the gasoline index, the energy index declined 0.3 percent, with the indexes for electricity and natural gas both falling.
Overall, the result was neutral, but the US Dollar remained in a bullish zone after the release.
Economic Releases to Watch Today
- German Wholesale Price Index for June 2018 (MoM) – Forecast +0.4%, versus +0.8% previous.
- US Import Price Index June 2018 (MoM) – Forecast +0.2%, versus +0.6% previous.
- US Export Price Index June 2018 (MoM) – Forecast +0.1%, versus +0.6% previous.
