USD/JPY has broken out of the squeeze between the 55 and 100-hour simple moving averages. However, the break out did not result in a sharp move, as the pair immediately was stopped by the resistance of the 109.00 level.
In regards to the near term future, it was most likely expected that the rate could be pushed up by the combination of the two mentioned simple moving averages.
Economic CalendarDue to the fundamental changes in the markets, Dukascopy Analytics suggests to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
In regards to the week up to April 10, Producers Price Index and Consumer Price Index could cause notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
Next week, data is bound to reveal, how the coronavirus has continued to impact the US economy.
On Wednesday, the US Retail Sales data sets are bound to be published at 12:30 GMT. Most likely they will surprise the markets with the reveal of a drop in US consumption.
On Thursday, all attention is expected to be set on the weekly US Unemployment Claims. During the last weeks this previously ignored announcement has been revealing shocking data, as during the two week period almost ten million US workers claimed unemployment benefits. The unemployment claims were previously ignored as they had stopped causing market reactions.
USD/JPY short-term daily review
The rate is expected to get pushed up by the 55 and 100-hour SMAs into the resistance of the weekly simple R1 pivot point at 109.24. If this level also gets broken, the pair would aim at the 61.80% Fibo and a R2 pivot point near 109.85.On the other hand, the SMAs might fail to push the rate up. In such a scenario the rate would test the 50.00% Fibo at 108.35. In addition, the Fibo should be soon strengthened by the 200-hour SMA.
Hourly Chart
On the daily candle chart, there was a quite rare situation. The rate was squeezed in between two daily simple moving averages, which were only 20 pips away one from another. Namely, the 100-day SMA provided resistance, and the 55-day SMA was supporting the rate.
Daily chart
On Thursday, 61% of trader open position volume was bearish.
Previously, on Wednesday, 64% of trader open position volume on the Swiss Foreign Exchange was in short positions. Before that, the sentiment had declined to 61% short on Tuesday.
During the week before April 5, traders were also short with more than 60% of open position volume being bearish.