The USD/JPY was recovering on Wednesday. By the middle of the day, the rate had broken resistance of a descending channel pattern and jumped up to the 107.70 level.
If the resistance at 107.70 gets broken, the rate would surge up tot eh 200-hour SMA at 107.86.
The Federal Reserve released the FOMC Statement, where the US policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Federal Funds Rate unchanged. Note, that FOMC Economic Projections were released at the same time.
The Fed suggested that it would cut the interest rate in 2020. The median target for the federal funds rate remains 2.4% for 2019. Note, that the Federal Reserve has not cut the rate since the financial crisis. However, recent employment data set and inflation data releases have led analysts to forecast cut rates in the future.
Minor US events
The data that is noted by the financial markets as important starts on Wednesday. On that day, the US Durable Goods Orders and Core Durable Goods Orders will be published at 12:30 GMT.
This event since February has caused moves from 3.9 to 16.5 pips. Moreover, the 16.5 pip was an anomaly, as the rest of the events have caused from 3.9 to 7.6 pips.
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
The USD/JPY continues its bounce off from the lower trend line of a dominant descending pattern. By the middle of Wednesday's trading the rate had reached the weekly pivot point at 107.70 level.If this level gets broken, the rate would test the resistance of the 200-hour simple moving average at the 107.86 level. Note that above the SMA there is no technical resistance as far as 108.36.
Meanwhile, the SMA might push the rate down to look for support in the technical levels that are located just below the 107.40 level.
Hourly Chart
On the daily candle chart, the rate is making movements in the borders of a large descending channel pattern. Namely, the Wednesday's surge was a consolidation after the drop from 108.50 level.
In the meantime, the pair still has room for a decline, as the lower trend line of the pattern was located below the 106.50 level.
Daily chart
On Tuesday, traders on the Swiss Foreign Exchange were still short. Namely, 73% of open USD/JPY position volume was in long positions.
By the middle of Wednesday 71% of volume was in long positions. Traders, who had stuck to their long positions throughout the drop were recovering their losses.
Meanwhile, trader set up pending orders were neutral since Tuesday, as 50% of pending commands in the 100-pip range were set to buy. Previously, sell orders dominated.