Due to the tensions between the US and Iran the USD/JPY has traded with high volatility, bouncing around the 108.00 level.
In the meantime, from a technical perspective the rate was consolidating its previous decline. It was shown by the hourly simple moving averages being above the pair.
On Wednesday, the ADP Non-Farm Employment Change is scheduled to be released at 13:15 GMT. Dukascopy analytics dropped the cover of the ADP due to it not causing increases of volatility.
However, the last release caused a move on the EUR/USD above ten pips. It is the criteria whether to take or not take into account a data release.
The week will end with the three US employment data sets being published at 13:30 GMT. Since August 2019, the USD/JPY has moved from 26.7 to 49.8 pips on the release.
The week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 06.01-10.01 Event Historical Reactions
USD/JPY short-term daily review
On Friday, the USD/JPY currency pair traded sideways at the 108.00 area. During today's morning, the pair was testing the resistance level—the monthly S1 at 108.17.Note that the exchange rate is pressured by the 55– and 100-hour moving averages. Thus, it is likely that some downside potential could prevail in the market. In this case, the rate could gain support of the monthly S2 at 107.65.
On the other hand, the US Dollar could maintain its consolidation against the Japanese Yen in the short run. Also, it is unlikely that bulls could prevail, and the pair could exceed the 108.60 level.
Hourly Chart
On the daily candle chart, the rate has dropped more than expected, as it has retreated below the 38.20% Fibonacci retracement level at 108.44 and the 100-day simple moving average.
Due to that reason the pair has no technical support on the daily candle chart as low as a 23.60% Fibonacci retracement level at 107.00. However, note the weekly S1 support at 107.49.
Daily chart
Read More: Technical Analysis
Traders remain short
On Monday. 61% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
The sentiment was 71% short on Friday.
Meanwhile, trader set up pending orders were majorly bearish. In the 100-pip range 81% of pending orders were to sell and 19% were to buy.
On Friday, 72% of orders were to sell.