However, most price action occurred during the follow up press conference at 18:30 GMT up to 19:30 GMT. The press conference is more notable due to the Chairman of the Federal Reserve taking journalist questions. If the journalists do their job properly, they get more information out of the Chairman about the future supply and value of the USD.
In general, the Chairman said that the Fed is not thinking to do anything. It would take a lot of bad economic data for the Fed to cut interest rates. Meanwhile, potential hikes would take a lot higher than current inflation. Moreover, the Chairman expressed that inflation should decrease when the winter passes and shelter costs decrease. Namely, as people spend less for heating, inflation numbers are set to go down.
During these events, the Bank of Japan intervened in the market and started to buy up the Yen. Namely, it added massive energy to the move in an effort to strengthen the national currency. As a result of the fundamentals and market manipulation, the USD/JPY declined and found support in the weekly S2 at 152.99 and the 153.00 level. As soon as the central bankers thought the job is done, the pair retraced and on Thursday faced the resistance of the 155.00 level and the 200-hour simple moving average.
Economic Calendar
There is one more important event this week. On Friday, at 12:30 GMT the US Bureau of Labor Statistics will reveal the monthly employment data for the United States. The data release consists of three data sets.
First and most important is the Non-farm Employment Change that shows the number of new employed people over the month.
Secondly, the markets watch the Average Hourly Earnings monthly change. If there are less people employed, but the rest are getting paid a lot more it is still a sign of upcoming inflation.
Third and the least watched is the official Unemployment Rate. This numbers is politicized and manipulated so much that it barely reflects the real situation in the labour markets. Pure numbers like the data above are what the markets watch.
USD/JPY hourly chart analysis
In the near term future, if the markets give up and the USD/JPY declines, the rate would look for support in the 154.50 level. Further below note that the 153.00 and the weekly S2 have also shown to be capable of acting as support. Even further down, watch round exchange rate levels that could reverse a decline, before the pair reaches the 150.00 mark.If the Bank of Japan fails in its attempts to start a broader decline, the pair would surge and test two resistance clusters. First of all, the combination of 156.00 level, the weekly 200-hour simple moving average and the weekly S1 simple pivot point might impact the rate. Higher above, note the 157.00 mark that is strengthened by the 50 and 100-hour simple moving averages and the weekly simple pivot point.
Hourly Chart
USD/JPY daily chart's review
The daily candle chart of USD /JPY shows the prior high levels that could all turn into support in the case of a decline. Meanwhile, note the ascending 50-day simple moving average that has passed above 150.00.Daily chart
During Tuesdays trading, trader open position volume showed that Dukascopy traders were 73% long.
Meanwhile, pending orders in the 100-point range around the rate were 52% to buy the USD/JPY.
After the bank events and actions, the traders were still long, as 75% of volume was in bullish positions. Pending orders were 67% to buy.
Dukascopy traders have the opinion that the Bank of Japan cannot stop the market and the Yen will fall.