The USD/JPY has recovered due to the phenomena, but it encountered resistance and stopped at the 141.85/142.05 zone and the 100-hour simple moving average. In the meantime, Dukascopy traders had stuck to their short positions, expecting the decline to continue.
Economic Calendar
At the start of 2024, notable events start on Wednesday. At 15:00 GMT, watch the Institute for Supply Management Manufacturing Purchasing Managers Index survey results and the JOLTS Job Openings number. Note that the two releases could cause a major impact, if both shows either better or worse than expected data.
On the same day, some impact could be created by the publication of the Federal Reserve Open Market Committee Meeting Minutes publication. The Meeting Minutes are a protocol of the US monetary policy maker's last meeting. It can reveal additional information on future US base interest rate policy.
On Thursday, the US ADP Non-Farm Employment Change is capable of impacting the markets. The Automatic Data Processing released number usually is a good indicator of what the US government data will show, as it occurs prior to the official publication of employment numbers. The event is scheduled for 13:15 GMT.
On Friday, the US monthly employment data sets will be published. The event is scheduled for 13:30 GMT.
They are bound to impact the financial markets via the value of the US Dollar. Namely, good data reveals that inflation might return and the Fed would have to keep rates high or even cut. This would cause a surge of the Dollar. On the other hand, bad data would weaken the USD, as the Fed can cut rates.
USD/JPY hourly chart analysis
A potential breaking of the 142.05 level and the 100-hour SMA could result in a move to the combination of the 142.50 level and the 200-hour simple moving average. Higher above, note the 143.00 mark and the weekly simple pivot point at 143.23.On the other hand, a resumption of the broader decline of the US Dollar against the Japanese Yen would have to pass below the support range at 140.95/141.20. Below the support range, the 140.00 mark is set to act as support.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, the USD/JPY face a resistance line that has kept the rate down since the pair booked the high level on November 12. Most recently, the trend line held and supported the combination of the 200-day SMA and the 144.60/146.00 zone.Regarding the future, if the 140.00 mark does not act as support, note the support and resistance range at 137.30/139.40.
Daily chart
On Wednesday, traders were 51% long and orders were 63% to sell the pair.
On Thursday, traders were 63% short. As the rate dropped, short positions were opened.
Meanwhile, pending orders in the 100-pip range around the pair were 70% to sell. Namely, more short positions could be opened in the near term future.
On Friday, 62% were short and orders were 78% to sell. Traders appear to understand why USD retracement occurred and still expect the pair to go down.