The US dollar fluctuated in a tight range slipping towards the Asian session to see its fourth session rebound in seven sessions from its highest since December 20 against the Japanese yen following developments and economic data that followed the Japanese economy, the third largest economy in the world and on the brink of developments and data Economic outlook on Wednesday by the US economy, the world's largest economy.
At 05:52 GMT, the pair dropped 0.02% to 111.34 from the opening level at 111.36 after recording a low of 111.14 and a high of 111.38.
We followed the Japanese economy to release inflation data with the release of the Producer Price Index (PPI), a preliminary index of inflationary pressures, which showed 0.2% growth versus 0.6% contraction in January, beating expectations of 0.1% growth. The same index accelerated growth to 0.8% versus 0.6%, also surpassing forecasts that indicated accelerated growth to 0.7%.
Markets are also looking to release the Producer Price Index (PPI), a preliminary indicator of inflationary pressures, which may reflect a 0.2% expansion versus 0.1% contraction in January, while the annual reading of the same index may show a slower growth to 1.9% versus 2.0% Previous for January.
The core reading of the PPI shows a slowdown in growth to 0.2% from 0.3% in January, while the core annualized reading of the same index may reflect a 2.6% growth rate unchanged from the previous December reading, Before we see a reading of the construction spending index, which could reflect a rise of 0.4% versus a 0.6% decline in December.
Technical Analysis
The USD / JPY continues to move in the sideways range between 110.96 and resistance at 111.37, although the movement is inclined to rise but only if 111.37 breaks above and closes above it.
The movement is between the moving averages 7 and 20 from the bottom and the 50 moving average from the top which also constitute support levels and resistance to the price.
The stochastic in a sideways course also tends to move towards the oversold area which may increase the positive pressure on the price and push it to test resistance at 111.37.
The trading range between resistance 111.37 and support 110.96 and the general trend depends on the breach of one of the mentioned levels