As expected, the USD/JPY continued to surge after the publication of Thursday's Trading Idea. By the middle of Friday's London trading, the rate had reached and bounced off the 109.70 level.
In the meantime, it could be observed on the daily candle chart that the rate could reach the 109.80 level.
On Thursday, December 12, the USD/JPY appreciated 1.06% or 115 pips.
The drop was driven by an announcement made by the US President Donald Trump via Twitter. Trump wrote that the US and China were getting "very close" to reach agreement on trade tensions.
The US-China trade war began in January 2018. Currently, the US applied tariffs on the Chinese goods worth $550B. China responded with tariffs on $185B worth of the US products.
Economic Calendar
Next week, this pair could be impacted only by one data release. On Friday, the US Final GDP is set to be published at 13:30 GMT. However, since September 2018, the USD/JPY has moved only from 6.3 to 8.9 pips on the announcements.
Meanwhile, the week's scheduled event historical data tables have been published. Click on the link below to read the article.
USD/JPY short-term daily review
The USD/JPY pierced the upper trend line of one version of the trend line, which connects the 2018 and 2019 high levels. It indicates that the long term decline is over.In regards to the near term future, the rate could consolidate after the sharp surge before resuming climbing higher. In that case, the pair would look for support in the pivot point at 109.43.
On the other hand, the pair could pierce the pivot point and retreat back to the support levels near 109.00.
Hourly Chart
On the daily candle chart, the rate is testing the resistance of a 50.00% Fibonacci retracement level at 109.60. The same retracement level stopped a surge in late November.
Daily chart
On Friday, 72% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, trader set up pending orders were mostly to sell. In the 100-pip range 89% of pending orders were to sell and 11% were to buy.