On Tuesday morning the USD/JPY continued to trade below the technical resistance levels that were located just below the 108.50 level.
Although, the rate might finally pass these levels, as the technical support of the 55 and 100-hour simple moving averages was approaching the pair from below.
Institute for Supply Management released the US ISM Manufacturing PMI data , which came out better-than-expected of 51.7 compared with the forecast of 51.3.
According to the official release: "Respondents expressed concern about U.S.-China trade turbulence, potential Mexico trade actions and the global economy. Overall, sentiment this month is evenly mixed. Of the 18 manufacturing industries, 12 reported growth in June."
US Employment and ISM PMI
On Wednesday, the ISM Non-Manufacturing PMI will be published at 14:00 GMT. The data release has caused moves from 8.5 to 20.9 pips on the charts.
For this pair the week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the USD/JPY charts this event has caused moves in a range from 13.4 to 38.9 pips since February.
USD/JPY short-term daily review
On Tuesday morning the USD/JPY remained below the resistance levels that strengthened the 108.50 level. Meanwhile, the rate was being approached from below by the 55 and 100-hour simple moving averages.In general, the rate was more likely expected to be pushed up through the 108.50 level by the technical support of the simple moving averages.
On the other hand, the rate could pass the support levels and decline down to the weekly PP at 107.85.
Hourly Chart
On the daily candle chart, the rate was testing the upper trend line of a long term descending channel pattern. Namely, the pattern that has guided the rate since May was being tested.
Due to the recent move being fundamental, it was assumed that the pattern will be broken. This occurred on Tuesday morning by trading sideways.
Daily chart
By the middle of Monday's trading session, on the Swiss Foreign Exchange 72% of trader open USD/JPY position volume was in long positions.
On Tuesday, the sentiment had increased, as 75% of volume was in short positions.
Meanwhile, trader set up pending orders were neutral, as 52% of pending commands in the 100-pip range were set to buy and 48% were to sell.