The USD/JPY continued to decline sharply, as during Tuesday's GMT trading hours, the rate had reached the 105.40 level.
Moreover, the most close by technical support level was located at 105.12, which indicates that the decline should continue.
Economic Calendar
Despite the week having high impact events on the calendar, Dukascopy Analytics do not expect notable macroeconomic data caused moves.
First of all, note that the FOMC Meeting Minutes on Wednesday will not have a rate announcement and a statement. The Meeting Minutes on their own were excluded from the historical data analysis after for a half-year period it caused only four pip moves on the EUR/USD. Equivalent minor moves occurred on other pairs.
On Thursday, the weekly US Unemployment Claims are set to be published at 12:30 GMT. The event has caused minor moves throughout July.
Click on the link below to find out more about the data releases.
USD/JPY short-term daily review
In theory, the decline of the pair should reach for the weekly S2 simple pivot point, which was located at the 105.12 level. However, round price levels like the 105.40 and 105.20 could provide psychological support and stop the decline.In the meantime, the rate left far above it the hourly simple moving averages, which indicates that the rate is oversold. Due to that reason, the currency exchange rate could consolidate by trading sideways.
Hourly Chart
On the daily candle chart, the rate has bounced off the resistance of the 55 and 100-day simple moving averages. Note that these SMAs also kept the rate down in late June and July.
Daily chart
On Tuesday, traders of the Swiss Foreign Exchange were bearish, as 61% of all open position volume was short.
During Monday's GMT trading hours, the sentiment was 57% short.
Meanwhile, trader set up pending orders in the 100-pip range were 70% to buy.
Previously, the orders were 52% to buy. It appears that the short positions have closed in on their take profits.