As it was expected, the USD/JPY retreated as soon as it touched the 55-hour SMA. Although, on Tuesday morning the decline was over, as it was stopped by the 200-hour SMA.
As the 200-hour SMA was a lone technical support level, Dukascopy Analysts expect it to be passed after a period of consolidation of the decline.
The Bureau of Labor Statistics released the US Non-Farm Employment Change, which came better-than-expected of 196K compared with forecasted 172K. Note, that the US Average Hourly Earnings and the Unemployment Rate were released at the same time.
On March, the US economy generated more jobs than expected, and the confidence in the state of labor market strengthened. Also, the slowdown in wage inflation supported the Fed's resolution to lessen further policy tightening.
Busy Wednesday
This week data releases are set to start on Wednesday. On that day the calendar is full of events that have impacted various currencies in the past.During the morning hours of the day the UK GDP and Manufacturing Production are expected to cause an impact on the GBP currency pairs. The data release is scheduled to occur at 08:30 GMT.
At 11:45 GMT all attention will be given to the ECB. At that time the ECB Main Refinancing Rate and Monetary Policy Statement will be published.
Although, note that these European Central Bank announcements do not create the moves on the EUR pairs. They are caused by the ECB Press Conference, during which the President of the ECB reveals new information by answering questions. The press conference starts at 12:30 GMT.
Meanwhile, exactly at 12:30 GMT USD pairs will be impacted by the publication of the US Consumer Price Index data. This can cause a move of up to 20 pips on USD pairs.
Wednesday will end with an above all fundamental event. The Federal Reserve Federal Open Market Committee will publish their Meeting Minutes.
In the publication the Fed will officially announced their future plans for US monetary policy.
That will be all on Wednesday. On Thursday, the week's events will end with the US Producers Price Index publication at 12:30 GMT. This event on average causes moves around 10 base points.
All of these events will be covered by Dukascopy Analytics. The covers of these events and the weekly economic calendar review can be watched on the Dukascopy Webinars channel.
USD/JPY short term daily review
On Tuesday morning the USD/JPY bounced off the support of the 200-hour SMA at 111.25. The bounce off occurred after a sharp decline down from the 111.55 level.In regards to the near-term future, the rate could be pushed up to test the resistance levels near the 111.45 level. At that level the weekly PP is located together with the upper trend line of a descending channel pattern. Moreover, the 55 and 100-hour SMAs would most likely reach that level by the time that the USD/JPY would surge to it.
On the other hand, the 200-hour SMA might fail and the rate would have no support as low as 111.10, which would then be reached.
Hourly Chart
On the daily chart the rate has fallen below the support of the 200-day SMA, which supported the USD/JPY during the previous three trading sessions.Daily chart
Since Monday, traders were short on the USD/JPY, as 66% of total open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were bullish. 57% of orders were set to buy.