Fundamental Analysis of USD/JPY for December 12, 2017

USD/JPY has been impulsive and non-volatile with the bullish gains after bouncing off the support area of 110.80 to 111.70. JPY has been quite positive with the recent economic reports that helped the currency to gain some momentum and halt the impulsive gains of USD along the way. On the other hand, high impact economic reports from the US are going to be published this week which includes Federal Funds Rate report which will announce the rate increase to 1.50% from the previous value of 1.25%. Today, Japan's PPI report was published with an increase to 3.5% from the previous value of 3.4% which was expected to decrease to 3.3% and Tertiary Industry Activity report was published with an increase to 0.3% from the previous negative value of -0.2% which was expected to be at 0.2%. As the readings were better than expected, JPY gained good momentum against USD today which is expected to pause the bullish move with certain consolidation before the Rate Hike. On the USD side, NFIB Small Business Index report is due later today which is expected to increase to 104.6 from the previous figure of 103.8, PPI is expected to be unchanged at 0.4%, and Core PPI is expected to decrease to 0.2% from the previous value of 0.4%. To sum up, JPY is currently quite strong in light of Japan's economic reports that provided JPY with some support today and may lead to some consolidation before the Fed's rate hike when USD is expected to shoot up higher towards 116.50 in the future.

Now let us look at the technical chart. The price is currently showing some bearish pressure in the impulsive bullish trend. The price is currently expected to correct itself a bit which might fall towards the dynamic level of 20 EMA or 113.00 support area before launching up higher towards 116.50 after the rate hike decision on Wednesday. As the price remains above 113.00, the impulsive bullish bias is expected to continue further.

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The material has been provided by InstaForex Company - www.instaforex.com