On Thursday, the USD/JPY traded sideways below the 110.00 level. The sideways trading was expected to continue until the rate is approached by the support of the 55-hour simple moving average.
Meanwhile, it was possible that the rate could decline down to the SMA instead of waiting for it to move upwards.
This Friday, the US employment data sets are set to be released at 13:30 GMT. Meanwhile, next week's event historical reactions have been published.
On Thursday, the US CPI data sets are set to be published at 13:30 GMT. The USD/JPY has moved from 8.2 to 16.3 pips because of the release.
On Friday the US Retail Sales data will be out also at 13:30 GMT. This event has caused moves on the USD/JPY pairs since September 2019 from 8.7 to 25.4 base points.
Read More: 10.02.-14.02 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair raised to the resistance level formed by the weekly R3 and the monthly R1 at 109.90. During Thursday morning, the pair was testing the given resistance.If the given resistance level holds, it is likely that a reversal south could occur in the nearest future. Note that the currency pair could gain support of the 55-hour SMA, as well the weekly R2 and the Fibo 50.00% in the 109.60 area.
If the given resistance level does not hold, it is likely that the US Dollar could continue to appreciate against the Japanese Yen in the short term. In this case a possible upside target is the psychological level at 110.20.
Hourly Chart
On the daily candle chart, the rate has passed the resistance of the 55-day simple moving average. This fact, combined with the 100 and 200-day SMAs being left below 109.00, signals that the rate is overbought.
Daily chart
Read More: Technical Analysis
Short sentiment remains unchanged
Since Wednesday, 71% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 67% of pending orders were to sell and 33% were to buy.