The USD/JPY continued its surge on Thursday, as the 200-hour simple moving average failed to stop the surge of the rate.
The pair was set to reach the resistance levels that surround the 108.40 level. Namely, a 38.20% Fibonacci retracement level and a weekly R1 were located nearby.
The US Census Bureau released the US Core Durable Goods Orders data, which came out better-than-expected of 0.3% compared to forecasted 0.1%.
New orders for major the US-made capital goods increased better-than-expected in May. Shipments grew significantly. This advance might signal some stabilizing in business spending after it dropped earlier this year.
US GDP ends week for USD/JPY
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP. Since March 2018 this event has caused moves from 6.6 pips to 16.5 pips.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
USD/JPY short-term daily review
As the rate broke the resistance of the 200-hour simple moving average on Thursday morning, the pair had no technical resistance as high as the 108.36 level.In general, the pair was expected to reach the weekly R1 at 108.36. If this level would get broken, the 38.20% Fibonacci retracement level at 108.44 would provide resistance to the surge.
On the other hand, the surge has overextended, as the simple moving averages have been left below the rate. Due to that reason a consolidation can be expected. Namely, the rate could trade sideways or slightly decline.
Hourly Chart
On the daily candle chart, the rate is making movements in the borders of a large descending channel pattern.
On Thursday, it could be observed that the resistance line of the pattern was located at the 108.40 mark. Namely, the daily chart is strengthening the forecast of an end of the USD/JPY surge at that level.
Daily chart
By the middle of Wednesday, 71% of open USD/JPY position volume was in long positions. Traders, who had stuck to their long positions throughout the drop were recovering their losses.
On Thursday, the sentiment was 73% long. It indicates that some traders had opened additional long positions or closed short positions.
Meanwhile, trader set up pending orders were neutral since Tuesday, as 50% of pending commands in the 100-pip range were set to buy.
The situation changed on Thursday, as during the morning hours 62% of orders were to buy.