The decline of the USD/JPY has continued, as by the middle of Wednesday's GMT trading hours, the rate had reached the 106.40 mark.
Near that level the rate met with the weekly S3 simple pivot point. Future forecasts were based upon whether the support of the 106.40 holds.
Economic Calendar The week starts with the US Advance GDP release on Wednesday at 12:30 GMT. This is the first of three types of US quarterly GDPs. The Advance release reveals the first Gross Domestic Product numbers of a quarter. The following Preliminary and Final GDPs usually reveal slight adjustments. In general, the data will reveal the first impact of the coronavirus on the US economy.Afterwards, at 18:00 GMT, the Federal Reserve is bound to make a rate statement, which is bound to react to the ongoing economic decline. Take into account that the Federal Reserve Rate announcement and FOMC Statement are set to be followed by a Press Conference at 18:30 GMT.
In addition, note the US Unemployment Claims on Thursday at 12:30 GMT.
On Friday, the US ISM Manufacturing PMI is scheduled to be published at 14:00 GMT.
USD/JPY short-term daily review
During Wednesday morning, the pair was testing the support level—the weekly S3 at 106.44.If the given support holds, it is likely that a reversal north could occur. In this case the exchange rate would have to surpass the resistance level formed by the Fibo 38.20%, the weekly S2 and the monthly PP at 106.85.
If the given resistance holds, it is likely that the US Dollar could consolidate against the Japanese Yen in the short term. Otherwise, the rate could try to surpass the 55-hour SMA near 107.00.
Hourly Chart
On the daily candle chart, the rate has no technical support, as it could reach for the low level of March below the 102.00 mark.
Daily chart
Read More: Technical Analysis
Traders are short during the drop
On Tuesday, 58% of trader open position volume on the Swiss Foreign Exchange was in short positions.
By mid-Wednesday, traders were 60% short.
The sentiment had been mostly short for a week. It can be concluded that traders had gained profits during the decline.