As expected, the USD/JPY has continued to represent the risk on versus run to safety sentiments. The latest announcements of Iran standing down and the US not escalating have been the cause for a US Dollar's recovery against the Yen.
By the middle of Thursday's London trading hours, the pair had reached the resistance of a monthly pivot point at 109.47.
In the meantime, the rate was approaching the resistance of the 2018 and 2019 high level trend line.
Meanwhile, next week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 13.01-17.01 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair skyrocketed to the weekly R1 at 109.17. During Thursday morning, the pair raised to the monthly R1 at 109.47.From a theoretical point of view, it is likely that the exchange rate could reverse south from the upper boundary of the long-term descending channel at 109.60. In this case the rate could decline to the support formed by the 55– and 200-hour SMAs at 108.70.
On the other hand, the US Dollar could trade sideways against the Japanese Yen in the short run, as the currency pair could gain support of the weekly R1. Also, it is unlikely that the pair could breach the given channel north due to the resistance level—the Fibo 50.00% at 109.58.
Hourly Chart
As it was stated on Wednesday, the rate ignored all of the technical levels. The pivot points, simple moving averages and Fibo retracements were ignored during the recent fundamental adjustment, as fundamentals of the recent kind are always above everything else.
Currently, as there are no more news expected, the technical can once more be used for guidance. Namely, on the daily candle chart one can better observe the resistance trend line and the 50.00% Fibonacci retracement level.
Daily chart
Read More: Technical Analysis
Traders increase short positions
On Wednesday, 53% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
By the middle of Thursday, the sentiment was 62% short.
Meanwhile, in the 100-pip range 72% of pending orders were to sell and 28% were to buy.