USD/JPY retraces from multi-month high after US PPI print
|After seesawing between minor losses to 108.80 and a subsequent rise to fresh multi-month high level of 109.76, the USD/JPY pair has now turned neutral after US PPI print.
According to the data released just a while ago, US Producer Price Index (PPI) for October fell short of expectations and remained flat on monthly basis. Meanwhile, core PPI (excluding food and energy prices) unexpectedly fell into negative territory and came-in at -0.2% in October as against 0.2% expected and also recorded in September.
The data failed to impress bulls and attract fresh buying interest, forcing the pair to trim some of its strong gains to the highest level since early June. However, the pair's near-term bullish momentum remains intact and the pair remains comfortably above 109.00 handle to currently trade with marginal gains around 109.30-25 band.
Next on tap would be industrial production and capacity utilization rate, which would be further looked upon to gauge health of the US manufacturing sector and might provide some impetus for short-term traders.
Technical outlook
Slobodan Drvenica, Information & Analysis Manager at Windsor Brokers Ltd., notes, "Bulls are eyeing psychological 110.00 resistance, above which there will be no significant obstacles until 111.36 (50% retracement of larger 123.74/98.98 descend/May’s high). Hesitation at 110.00 could be anticipated as daily studies are strongly overbought, though no signs of generating firmer bearish signals for now. Bids lay at 108.80/50 zone, where corrective dips should be contained."
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