The USD/JPY recovery has run into resistance. The rate has retraced back down to the levels near the 108.40 mark.
The rate faces the resistance of the 38.20% Fibonacci retracement level at 108.43, and the 100 and 200-hour simple moving averages respectively at 108.48 and 108.54.
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The meeting summary stated, "With an increase in the target range at this meeting, the federal funds rate would be at or close to the lower end of the range of estimates of the longer-run neutral interest rate, and participants expressed that recent developments, including the volatility in financial markets and the increased concerns about global growth, made the appropriate extent and timing of future policy firming less clear than earlier."
US CPI on Friday
At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip moves on various currency exchange rates that involve the US Dollar.Meanwhile, note that on Monday, at 12:00 GMT the weekly Economic Calendar Analysis stream will take place. It can be watched later by clicking on the links on the daily Trading Ideas publications.
USD/JPY short term daily review
During the previous trading session, the US Dollar passed the resistance of the 38.20% Fibonacci retracement level to end the trading session at 108.48. During Friday morning hours, the currency exchange rate was resisted by the 100-hour simple moving averages to the 108.30 mark.It is expected that the currency exchange rate will be trading sideways between the 38.20% Fibo at 108.43 and the weekly pivot point at 107.96.
On the other hand, the US Dollar could be depreciated against the Japanese Yen during today's US CPI and Core CPI data releases at 13:30 GMT to trade below the weekly pivot point at the 107.60 level.
Hourly Chart
An update to the Daily chart is needed on Thursday. The rate is still located below the various SMA's, which is indicating that the pair has to retrace back upwards.The rate had no resistance previously as high as the 111.00 mark. Although, the pair bounced off the 109.00 level due to the weakness of the USD caused by the Federal Reserve announcements on Wednesday.
In general, it can be observed that the USD/JPY is trading sideways looking for future direction. Meaning, after the drop caused by the USD weakness and the subsequent comments that the US Federal Reserve will do something about it, the USD/JPY stands waiting for long term signals.
Daily chart
The drop of the long sentiment that occurred throughout the week has ended. Namely, the sentiment dropped from 69% being long at the start of the week to 58% long on Thursday.
On Friday, 60% of all open positions on the Swiss Foreign Exchange were long.
Meanwhile, trader set up pending orders, stop losses, take profits and position open orders in the 100-pip range were bearish, as 56% of orders were set to sell.
Most likely they are the close by stop losses of the long positions that expect a surge from the current sideways trading.