US PPI unexpectedly contracted in December, while weekly jobless claims also missed expectations.
Producer Price Index (PPI) came in at -0.1% m/m as against 0.4% rise recorded in the previous month. Initial weekly jobless claims rose to 261K during the week ended Jan. 6.
USD/JPY is extending massive downside following Tuesday’s reduction in JGBs purchases by the BoJ.
Technically, the pair is trading with a bias. Indicators on support more downside.
The pair has broken major supports and is currently hovering around 111.12, scope for test of 110 levels.
Upside capped at 200-DMA at 111.69, invalidation on retrace above.
Markets focus on US CPI and retail sales data due later in the NY session for further impetus.
Support levels - 111, 110.84 (Nov 27 low), 110.15 (61.8% Fib retrace of 107.318 to 114.737 rally).
Resistance levels - 111.69 ( 200-DMA ), 112, 112.21 ( 100-DMA )
Good to go short on rallies around 111.25, SL: 111.75, TP: 110.90/ 110.15/ 110