The decline of the USD/JPY that was caused by the Bank of Japan continued after retracing back up to the resistance of the 55 and 100-hour SMAs. Eventually, a low level was reached at 109.80, from where another surge started.
By the middle of Wednesday's trading, the surge had stopped, as the rate was being squeezed in between hourly simple moving averages.
Japanese Yen Appreciated on Raised Growth Forecast
On Tuesday, January 21, the Japanese Yen appreciated 45 pips or 0.41% against the US Dollar.
The advance was driven the BOJ Outlook Report release. According to the report, the Bank of Japan raised its economic growth forecasts, as well became carefully optimistic about the global outlook.
Meanwhile, other major central banks are only reconsidering their monetary policies.
Economic CalendarThe 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
Yesterday, the USD/JPY currency pair tested the lower boundary of the medium-term ascending channel at 109.80. During Wednesday morning, the rate was testing the support provided by the 200-hour SMA at 109.96.Given that the exchange rate is pressured by the 55– and 100-hour moving averages, it is likely that bears could prevail in the market. Thus, the rate could re-test the lower channel line in the nearest future.
However, if the given resistance does not hold, the currency pair could trade upwards within the following trading session. In this case the pair could target the monthly R2 at 110.25.
Hourly Chart
On the daily candle chart, the rate appears to be consolidating in the aftermath of the early January high volatility and surge.
In the meantime, note that the rate has left below it the daily simple moving averages. It signals that the rate is overbought.
Daily chart
Since Tuesday, 71% 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. The orders had not changed since Monday.