On Friday, May 7, the USD/JPY experiences a sharp drop at 12:30 GMT. The move was caused by the worse than forecast US labour data. The rate suffered a 81 pip drop.
However, by the middle of Monday's trading hours, the pair had recovered back to the 109.00 level, where it encountered resistance.
Economic Calendar
The rate could move due to the US CPI on Wednesday at 12:30 GMT. The pair has moved from 8.1 to 27.1 pips on the release.
On Friday, the US Retail Sales and Core Retail Sales at 12:30 GMT are bound to move the pair, as the release had moved the pair from 9.3 to 16.7 since December.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term review
If the rate fails to pass the resistance levels that surround the 109.00 level, it could decline to the 50.00% Fibonacci retracement level at 108.35. This level provided support on Friday.On the other hand, a potential breaking of the 109.00 level and the simple moving averages above it could result in a surge to the 109.40 level.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, it can be observed that the pair has reached the support of the 55-day simple moving average, which previously reversed the April decline.Daily chart
On Friday, traders on the Swiss Foreign Exchange were 62% short on USD/JPY. On Monday, 63% were short.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 52% to sell the pair.