As forecast, the hourly simple moving averages gave the USD/JPY the needed strength to push through the 106.20 level. Namely, the 55-hour SMA caused a surge, which passed the resistance.
By the middle of Wednesday's GMT trading hours, the rate had reached the resistance of a 38.20% Fiobnacci retracement level at 106.86.
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USD/JPY short-term daily review
On Tuesday, the USD/JPY currency pair jumped to the 106.60 level. During today's morning, the pair was testing the Fibo 38.20% at 106.86.If the given level holds, it is likely that a reversal south could occur in the nearest future. In this case it is unlikely that the exchange rate could decline below the support area formed by the 55-, 100– and 200-hour SMAs, as well the weekly and monthly PPs in 105.80/106.25.
Meanwhile, note that the currency pair could gain support from the weekly R1 located at 106.51. Thus, it is likely that the Greenback could trade sideways against the Japanese Yen in the short term.
Hourly Chart
On the daily candle chart, the rate has broken the channel down pattern that has guided the rate since June.
In addition, note that the rate has reached the resistance of the 55 and 100-day simple moving averages.
Daily chart
On Wednesday, traders of the Swiss Foreign Exchange had closed their long positions, as only 52% of all open position volume was long.
During Monday's GMT trading hours, the sentiment was 62% long.
Meanwhile, trader set up pending orders in the 100-pip range were 54% to buy. Previously, the orders were 75% to sell.
The previous sell orders were executed, as short positions were opened and long positions were closed.