During Wednesday morning, the USD/JPY currency pair was testing the support level formed by the 200-hour SMA and the weekly PP at 107.63.
Given that the pair is pressured by the monthly PP at 107.84, it is likely, that the pair could trade sideways in the short term.
Institute for Supply Management released the US ISM Manufacturing PMI data , which came out better-than-expected of 51.7 compared with the forecast of 51.3.
According to the official release: "Respondents expressed concern about U.S.-China trade turbulence, potential Mexico trade actions and the global economy. Overall, sentiment this month is evenly mixed. Of the 18 manufacturing industries, 12 reported growth in June."
US Employment data set on focus
The week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the USD/JPY charts this event has caused moves in a range from 13.4 to 38.9 pips since February.
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair dropped to the support level formed by the 200-hour moving average and the weekly PP at 107.63. During Wednesday's morning, the pair was testing the given support.If the support level holds, it is expected, that the exchange rate could reverse north. However, note, that the rate has to surpass the monthly PP at 107.84.
It is unlikely, that the Japanese Yen could climb higher than the 108.01/108.14 range against the US Dollar due to the resistance of the 55– and 100-hour SMAs.
If the given support level and monthly PP hold, it is likely, that the pair could trade sideways within the following trading session.
Hourly Chart
On the daily candle chart, the rate reversed south from the upper boundary of the medium-term descending channel at 108.20.
From a theoretical point of view, it is likely, that the rate could maintain its decline in the nearest future.
Daily chart
By the middle of Monday's trading session, on the Swiss Foreign Exchange 72% of trader open USD/JPY position volume was in long positions.
On Wednesday, the sentiment had increased, as 75% of volume was in short positions.
Meanwhile, trader set up pending orders were bearish, as 59% of pending commands in the 100-pip range were set to sell.