The 55-hour SMA has pushed the USD/JPY currency exchange rate to a new low level. Namely, the 107.00 was tested on Tuesday.
The 107.00 was providing psychological support and was strengthened by a 23.60% Fibonacci retracement level.
Fed Rate Cut
The Federal Open Market Committee cut the Federal Funds Rate to a target range of 1.00% to 1.25% at an unscheduled emergency meeting.
The US policymakers announced the cut of the interest rate by a half of a percentage point in response to the increasing economic threat from the coronavirus outbreak.
Economic CalendarSome 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.
USD/JPY short-term daily review
On Tuesday, the USD/JPY currency pair declined to the Fibo 23.60% at 107.02. During today's morning, the pair reversed north.Note that the exchange rate is pressured by the 55-hour SMA near 107.75. Thus, some downside potential could prevail in the market. In this case the rate could gain support from the weekly S1 at 106.50.
However, if the given Fibo holds, it is likely that the US Dollar could consolidate against the Japanese Yen in the short run. Also, it is unlikely that bulls could prevail, and the pair could exceed the Fibo 38.20% at 108.44.
Hourly Chart
On the daily candle chart, the rate has left above it the resistance of the daily simple moving averages. The SMA's were left behind above the 108.00 level.
Daily chart
On Tuesday, 54% of open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
By the middle of Wednesday's GMT trading hours, the sentiment was 65% long.
Meanwhile, in the 100-pip range 52% of pending orders were to sell and 48% were to buy.