On Wednesday, an announcement by the government of Japan that the country's GDP will be reviewed cause a decline of the Japanese Yen. Namely, markets are speculating that the GDP will be reviewed to the downside. As a result, the USD/JPY broke the resistance of the 160.00 mark.
Meanwhile, we have noted that more than 70% of our traders were in long positions since the start of the month and have continued to gain from the USD/JPY surge.
Economic Calendar
This week, watch out for the US Core PCE Price Index release on Friday at 12:30 GMT. The inflation measure is bound to impact the financial markets through the value of the US Dollar.
USD/JPY hourly chart analysis
An extension of the ongoing surge could be slowed down by the weekly R1 simple pivot point at 160.68. However, as always, the USD/JPY rate is expected to respect round exchange rate levels. The 160.50, 161.00 and 161.50 could act as resistance, before the weekly R2 is reached at 161.60.However, a potential decline of the rate is expected to look for support in the 160.00 mark and the ascending hourly simple moving averages near 159.60 and 159.40. If these levels fail to provide support, the weekly simple pivot point and the 159.00 level might stop a decline.
Hourly Chart
USD/JPY daily chart's review
At the start of the month we wrote: "On the daily candle chart, the pair is being pushed up by the 50-day simple moving average. It has acted as support two times in combination with a round and notable exchange rate level. The SMA could push the pair into the prior high of 160.00 unless the Bank of Japan intervenes once again.The recent comments made by the central bankers could be considered a warning about upcoming intervention and might be enough for the 50-day simple moving average to fail."
The main bullish scenario has become reality, as the rate has passed above the prior April high level and the 160.00 mark.
Daily chart
Read More: Technical Analysis
Traders are bullish
Dukascopy traders had profited from the surge, as since the start of the month more than 70% were long on the pair.
On Wednesday, June 26, traders were still long, as 71% of open position volume was in bullish positions.
At the start of the month, pending orders in the 100-pip range around the current price were 89% to buy.
Today, traders had 62% of pending orders to buy. It appears that traders were sitting on profits and expecting more gains.