On Thursday, as the US market opened, the USD/JPY jumped. The reason was a tweet by the US President Donald Trump on trade deal progress with China.
The surge managed to pierce the 109.00 level, which signalled that the pair might reach even higher.
Economic Calendar
The week is set to end with the US Retail Sales data on Friday at 13:30 GMT. A move from 8.7 to 25.4 pips can be expected.
Meanwhile, next week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 16.12-20.12 Event Historical Reactions
USD/JPY short-term daily review
The fundamental surge of Thursday pierced the resistance levels that surround the 109.00 level. Due to that reason the pair had no technical resistance levels, as high as the 109.43 mark, where the weekly R1 simple pivot point was located at.If the pivot point fails to stop the surge of the pair, the USD/JPY would next reach for the 50.00% Fibonacci retracement level and trend line near 109.60.
On the other hand, the rate should consolidate, as the gains of the US Dollar against the Yen are sharp and have moved away from the hourly simple moving averages.
Hourly Chart
On the daily candle chart, the rate has broken out of the squeeze between the 55 and 200-day simple moving averages. The event was forecast, as the 200-day SMA was pierced during the previous week, indicating that it could be broken through.
Daily chart
Read More: Technical Analysis
Traders remain short
On Wednesday, 71% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Just after the sharp surge, 69% of volume was short.
Meanwhile, trader set up pending orders were mostly to sell. In the 100-pip range 89% of pending orders were to sell and 11% were to buy.