On Wednesday morning, the decline of the USD/JPY reached the monthly simple pivot point at 107.30.
Future forecasts were based upon what would happen at the pivot point.
Economic Calendar
At 18:00 GMT the US Federal Reserve is scheduled to make a rate announcement and FOMC Statement.
Prior to that, a minor reaction could be caused by the US CPI at 12:30 GMT.
In addition, economic calendars show the US PPI and Unemployment Claims on Thursday. The last PPI release caused a move below normal volatility.
USD/JPY short-term daily review
During today's morning, the pair was testing the support level formed by the monthly PP at 107.33.
If the given support level holds it is likely that a reversal north could occur in the nearest future. Meanwhile, it is unlikely that the exchange rate could exceed the 108.40 area due to the resistance formed by the 55– and 200-hour SMAs, as well the Fibo 50.00%.
If the given support level does not hold, it is likely that some downside potential could prevail in the market. In this case the pair could gain support from the weekly S2, the monthly S1 and the Fibo 38.20% in the 106.47/106.86 area.
On the daily candle chart, it was previously noted that the rate is overbought, as it had moved too far away from the simple daily moving averages. On Monday and on Tuesday, the rate had returned to the SMAs.
Namely, on Monday, the 100 and 200-day SMAs were reached on Monday. On Tuesday, they were passed and the 55-day SMA was reached.
On Wednesday, the support of the 55-day SMA was already passed. The SMAs could even provide resistance to any rate's recovery.
Daily chart
If the given support level holds it is likely that a reversal north could occur in the nearest future. Meanwhile, it is unlikely that the exchange rate could exceed the 108.40 area due to the resistance formed by the 55– and 200-hour SMAs, as well the Fibo 50.00%.
If the given support level does not hold, it is likely that some downside potential could prevail in the market. In this case the pair could gain support from the weekly S2, the monthly S1 and the Fibo 38.20% in the 106.47/106.86 area.
Hourly Chart
On the daily candle chart, it was previously noted that the rate is overbought, as it had moved too far away from the simple daily moving averages. On Monday and on Tuesday, the rate had returned to the SMAs.
Namely, on Monday, the 100 and 200-day SMAs were reached on Monday. On Tuesday, they were passed and the 55-day SMA was reached.
On Wednesday, the support of the 55-day SMA was already passed. The SMAs could even provide resistance to any rate's recovery.
Daily chart
Read More: Technical Analysis
Traders set up buy orders
On Wednesday, on the Swiss Foreign Exchange 63% of open position volume was in short position.
On Tuesday, 61% of volume was short.
Meanwhile, 67% of set up pending trade orders in a 100 pip range around the exchange rate were set to buy.
Previously, 59% of orders were to buy.