The break out from the squeeze of the USD/JPY has resulted in a new 2021 high level. However, after booking the high level, the rate retraced back down to the 109.00 mark.
In the near term future, the pair could be pushed up by the hourly simple moving averages.
Economic Calendar
On Tuesday, at 12:30 GMT expect the US Retail Sales and Core Retail Sales data. This publication could cause a move on the USD/JPY from 5.3 to 16.7 base points, as it has done since October 16, 2020.
On Wednesday, the US Federal Reserve is set to publish a FOMC Statement at 18:00 GMT and announce the Federal Funds Rate. This event is bound to set the tone for the whole global monetary policy. The USD/JPY has moved from 7.8 to 26.6 base points since November 5, 2020 on the announcement.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term daily review
In the near term future, the pair was expected to look for support at the 108.87 level. At that level the weekly simple pivot point and the 55 and 100-hour simple moving averages could provide support. Meanwhile, it was spotted that the 109.00 mark was providing support on Monday morning. This level should be first passed before reaching the mentioned technical levels.In regards to resistance, a potential surge of the rate would test the zone of the March high levels from 109.23 to 109.37. In the case of the zone not holding, the pair would immediately face the resistance of the weekly R1 at 109.44.
Hourly Chart
On the daily candle chart, the rate could eventually reach the 61.80% Fibonacci retracement level at the 109.83 level. This retracement level stopped the rate's early June's sharp recovery and forced the USD/JPY into continuing its large scale decline.
Daily chart
Since Thursday, traders were 73% short on USD/JPY.
The Swiss Foreign Exchange open positions have been mostly short for more than two weeks. It appears that traders expect a larger retracement back down.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 55% to sell.