The USD/JPY did not reach the cluster of resistance levels that was located above 109.00. Instead the rate bounced off the 108.75 level and declined to the 107.50 mark.
By the middle of the day's GMT trading hours, the rate was expected to head for a strong cluster of technical resistance levels that was spread from 109.10 to 109.34.
Economic CalendarDuring the week, historical data can be ignored, as the fundamental background has changed in a way that the data cannot help in making forecasts.
However, take a look at the list of previously notable events, as the markets will be looking at them to understand the impact of the coronavirus.
USD/JPY short-term daily review
During today's morning, the pair was testing the resistance formed by the Fibo 38.20% and the 55-hour SMA near 107.90.If the given resistance holds, it is likely that some downside potential could prevail in the market. In this case the exchange rate could gain support from the weekly S1, the monthly PP and the Fibo 50.00% in the 106.70 area.
If the given support level holds, the US Dollar could consolidate against the Japanese Yen in the short run. Also, it is unlikely that the bulls could prevail, and the pair could exceed the Fibo 23.60% at 109.34.
Hourly Chart
On the daily candle chart, the rate is trading near the daily simple moving averages, which provided resistance on Tuesday near the 109.00 level. Note that they continue to strengthen resistance at 109.00 and at 108.30.
Daily chart
Read More: Technical Analysis
Some traders go short
Since Monday, 62% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
The sentiment changed on Wednesday, as 64% of open position volume was short. Some traders opened short positions, as the rate bounced off the 108.75 level.