By the middle of Monday's trading session the USD/JPY had traded between the 108.55 and 108.70 levels.
In general, the rate was expected to continue to surge, as it faced no technical resistance levels as high as 108.87.
Bureau of Labor Statistics released the US Core CPI data, which came out worse-than-expected of 0.1% compared with forecast 0.2%.
According to the official release: "The food index rose 0.3 percent in May after declining in April, with the food index accounting for nearly half of the May seasonally adjusted all items monthly increase. The energy index fell 0.6 percent in May, with the gasoline index falling 0.5 percent and the indexes for electricity and natural gas also declining in May. The index for all items less food and energy increased 0.1 percent for the fourth consecutive month. The indexes for shelter, medical care, airline fares, education, household furnishings and operations, and new vehicles all rose in May. The indexes for used cars and trucks, recreation, and motor vehicle insurance were among those that declined over the month."
FOMC for USD/JPY on Wednesday
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
On Thursday, the Bank of Japan will make a Monetary Policy Statement and host a Press Conference. However, the time has not been set. Bank of Japan does not set an exact time for their monetary policy events.
USD/JPY short-term daily review
On Friday, the USD/JPY currency pair jumped to the 108.55 level. During Monday's morning, the pair was testing the psychological level at 108.65.From a theoretical perspective, bulls could prevail in the market in the short run, as the exchange rate has to target the upper boundary of the short-term ascending channel. In this case, the rate could reach the 108.75 mark.
From a technical point of view, it is unlikely, that the pair could go downwards because of the support cluster formed by a combination of the 55-, 100– and 200-hour SMAs, as well the weekly PP and the Fibonacci 38.20% retracement in the 108.41/108.51 range.
Hourly Chart
On the daily candle chart, a large descending channel pattern can be observed.
Also, as apparent on the chart, the rate is trading sideways around the Fibonacci 38.20% retracement at 108.43. No significant changes are expected in the near future.
Daily chart
On Monday, 72% of open position volume on the Swiss Exchange Market were long.
Meanwhile, trader set up pending orders remained almost neutral, as 53% of pending commands in the 100-pip range were set to sell.