The USD/JPY has reached a new low level by trading at the 107.50 level. On Monday, the rate was located at this level.
The pair was expected to continue to decline to the 107.00 level, as in the morning hours it had retraced back to the 108.50 mark and removed oversold pressure. In addition, there was no technical support as low as 107.00.
Economic CalendarAlready on Monday, a data release could cause a notable move.
The US ISM Manufacturing PMI is scheduled to be published at 15:00 GMT. This event has caused moves from 20.0 to 44.5 pips since October.
Some might consider watching the ADP Non-Farm Employment Change on Wednesday at 13:15 GMT. This event has caused moves from 3.2 to 15.1 pips.
On Wednesday, at 15:00 GMT the US ISM Non-Manufacturing PMI is set to be published. Last year, this event caused moves from 18.8 to 56.6 pips. This year, there were two moves of 5.6 and 13.9 pips.
On Friday, the US employment data will be released at 13:30 GMT. The event has caused moves from 19.5 to 49.8 pips since October.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, the week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
Read More: 02.03-06.03 Event Historical Reactions
USD/JPY short-term daily review
On Friday, the USD/JPY currency pair declined to the 108.00 level. During today's morning, the pair declined below the given level.Note that the exchange rate is pressured by the 55-hour SMA near 108.90. Thus, some downside potential could prevail in the market. In this case the rate could gain support of the Fibo 23.60% and the weekly S1 in the 106.50/107.00 range.
However, if the 107.50 level holds, it is likely that a reversal north could occur in the short term. In this case it is unlikely that the currency pair could exceed the weekly PP at 109.09.
Hourly Chart
On the daily candle chart, the rate has broken the support of the 200-day simple moving average. There is no additional support on the chart, which could stop a decline to the 107.00 level.
Daily chart
Read More: Technical Analysis
Traders become neutral
The short sentiment of the last week disappeared, as traders took profits throughout the week.
On Monday, 51% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 65% of pending orders were to buy and 35% were to sell.