The USD/JPY was testing resistance levels from 108.70 to 108.90 on Tuesday morning. By the middle of the day's London trading session, the rate had made a failed attempt to pass the resistance cluster.
In regards to the near term future, there were a couple of possible scenarios.
On Wednesday, the FOMC Meeting Minutes are set to be published at 19:00 GMT. Since April, the rate has moved from 7.7 to 15.3 pips in the five minutes following the release.
The week's reaction tables have been published. Take a look at the 18.11-22.11 Event Historical Reactions publication.
Read More: 18.11-22.11 Event Historical Reactions
USD/JPY short-term daily review
By the middle of Tuesday's London trading, the pair was located at 108.70, where it was located just below the 55 and 100-hour simple moving averages.If the SMAs manage to provide resistance to the rate, it should in theory decline down to the support of the 38.20% Fibonacci retracement level at 108.44.
If the resistance fails, the rate would pass the 55 and 100-hour SMAs, test the weekly simple pivot point at 108.79 and afterwards the 200-hour SMA at 108.92.
Hourly Chart
On the daily candle chart, the rate has passed the support of the channel up pattern. It is a signal that the large scale surge of the USD/JPY is over.
In the meantime, the rate was expected to be influenced by the support of the 55 and 100-day SMAs at 108.10 and 107.70. Moreover, the resistance of the 200-day SMA was located near 109.00.
Daily chart
Read More: Technical Analysis
Traders short the USD/JPY
Since Friday, 58% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, trader set up pending orders were bearish. Namely, in the 100-pip range 57% of pending orders were to sell and 43% were to buy.