The ongoing large decline of the USD/JPY stopped at midnight, when the rate reversed and began a recovery.
By the middle of Friday's GMT trading hours, the rate had reached back up to the 107.60 level, where it met with the resistance of the 100-hour simple moving average.
Economic Calendar
In regards to the USD/JPY during next week, there are a couple of scheduled macroeconomic data releases that could impact the currency exchange rate.
First of all note the US Retail Sales on Tuesday at 12:30 GMT. This event has caused reactions from 8.7 to 17.7 pips.
On Thursday, the US Unemployment Claims at 12:30 GMT will be discussed by most market participants. However, this release usually causes moves below ten pips.
Take a look at all of the historical reaction tables by clicking on the link below.
USD/JPY short-term daily review
On Thursday, the USD/JPY currency pair tested the support from the weekly S2 and the monthly S1 at 106.50. During today's morning, the pair reversed north.It is likely that some downside potential could prevail in the market, as the exchange rate is pressured by the 100-hour SMA near 107.60. In this case the rate could re-test the given support levels.
However, if the given moving average does not hold, it is likely that the pair could continue to extend gains. Note that the rate could face the resistance of the 200-hour SMA near 108.30.
Hourly Chart
On the daily candle chart, it was previously noted that the passed daily simple moving averages could start to provide technical resistance.
On Friday, the 55-day SMA began to do so, as it acted as a resistance level at the 107.64 level.
Daily chart
Read More: Technical Analysis
Traders continue to short USD/JPY
On Friday, on the Swiss Foreign Exchange 58% of open position volume was in short position.
Throughout the week around 62% were short. The change in sentiment indicates that some took profits during the Friday's retracement.
Meanwhile, 55% of set up pending trade orders in a 100 pip range around the exchange rate were set to sell.