Since the jump the rate was declining and by the middle of Wednesday's trading session the rate was about to reach technical support levels at 106.00.
US Retail Sales in focus
There are no data releases that might impact USD/JPY scheduled for Wednesday.
On Thursday, the US Retail Sales are expected to cause a move at 12:30 GMT. Note that this release will consist of two numbers.
The Core Retail Sales do not include auto sales. People buy cars on debt, paying the same amount of money each month and continue to buy the needed transportation no matter what. The elimination of auto sales improves retail sales as a measure of economic growth.
The data release since April has caused moves from 12.2 to 23.7 base points.
USD/JPY short-term daily review
On Wednesday morning the USD/JPY currency exchange rate was declining. The rate had no technical support level as low as the 200-hour SMA and the weekly PP at 106.00.In general, the pair was expected to reach this level, where it would consolidate by trading sideways.
Meanwhile, note that the rate was unlikely going to drop lower than the 105.90 level, as a monthly pivot point and two other hourly simple moving averages were set to provide support at that level.
Hourly Chart
On the daily candle chart, it can be observed that the surge of the currency exchange rate was stopped by a 23.60% Fibonacci retracement level at the 106.98 level.
Moreover, it appears that the large scale descending channel was only pierced and not broken.
Daily chart
Read More: Technical Analysis
Traders remain long
On Wednesday, 73% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up pending orders were bullish, as in the 100-pip range 71% of pending orders were set to buy and 29% were to sell.
Traders have gained profits due to the fundamental surge of the currency exchange rate.