The resistance of the 110.25 levels held on Friday. It caused a decline down to the 110.00 level, where the rate found psychological support from the round exchange rate level and the 55-hour simple moving average.
By the middle of Monday's trading, the rate was being pushed up by the 55-hour SMA into the resistance of the 110.20 level. In general, a squeeze was expected.
The week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 20.01-24.01 Event Historical Reactions
USD/JPY short-term daily review
On Friday, the USD/JPY retraced down to the support of the 55-hour simple moving average and the 110.00 mark. On Monday, the pair was still supported by the SMA. In the meantime, it faced the resistance of the 110.20 level.In regards to the near term future, the rate was expected to get squeezed in between the SMA and the 110.20 level. The squeeze should result in a break out to the downside or upside.
In the case of a break out down, the rate would aim at the 100-hour SMA. On the other hand, a break out upwards would test the pivot point at the 110.25 level.
Hourly Chart
As apparent on the chart, the pair passed the resistance of the 50.00% Fibo and the trend line of the 2018 and 2019 high levels. The rate continues to surge in the aftermath of the breaking of those levels.
However, the pair has left far below it the daily simple moving averages, which is an overbought signal. Due to that reason the rate should consolidate by trading sideways or declining.
Daily chart
Read More: Technical Analysis
Sentiment remained unchanged
Since Friday, 73% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 78% of pending orders were to sell and 22% were to buy.