On Friday, the rate was trading below a pivot point that is located at 106.54. The rate was consolidating and expecting the support of hourly simple moving averages, which were set to push the rate higher.
Economic Calendar This week's data releases have ended. See the reports in the Fundamental Analysis section.
Next week, there are a couple of US data releases on the economic calendars that are shown as high impact.
On Tuesday, at 14:00 GMT the US ISM Manufacturing PMI might impact the USD/JPY rate. Since April the announcement has caused moves from 13.9 to 24.3 base points.
On Thursday, the US ADP Non-Farm Employment Change will be published at 12:15 GMT. Although, note that this is one of the releases that should not have a high impact mark and be discussed by financial media, as it has lost its power to impact the financial markets.
Due to that reason, since October 2018 our analysts ignored this data release. Recently, due to the possibility that it might have regained its strength, data was checked.
During this summer, five minutes after the data release there were moves from 5.2 to 15.2 pips on USD/JPY chart.
On Friday, US employment data will be published. The event will have three numbers being revealed – the Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate.
Due to each of the numbers impacting the rate differently by pushing the value of the USD up or down and with a different strength, the event has a wide range. Namely, since April the USD/JPY has moved from 13.4 to 38.9 pips due to the US labour data.
USD/JPY short-term daily review
On Friday, the USD/JPY was consolidating below the 106.54 level, where a pivot point was located at.In general, the rate was expected to be pushed through the resistance of the pivot point as soon as the support of the 55 and 100-hour simple moving averages approach the rate from below and push it higher.
In that case, the rate would aim at the 107.00 level, where a 23.60% Fibonacci retracement level is located at.
The described scenario is favoured due to the pivot point being pierced on Thursday.
Hourly Chart
On the daily candle chart, the pair trades below the daily simple moving averages. It is an indicator of the rate being oversold.
In the meantime, note that during the most recent fundamental drop the rate pierced the lower trend line of a large scale descending channel pattern. The event hints that fundamental event are capable of breaking the pattern.
Daily chart
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Sentiment remains unchanged
On Friday, 65% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were bearish. Namely, in the 100-pip range 59% of pending orders were set to sell and 41% were to buy.
The only change since Thursday is a drop of one percent of the open long position proportion.