As the rate was testing the resistance of the 110.40 level, the US ADP payrolls caused an all-out USD drop. On the USD/JPY charts it resulted in a decline to the support of the 200-hour simple moving average at 109.90.
By the start of Thursday's European trading hours, the SMA was still keeping the rate up, as it tested its support three times.
Economic Calendar
The top day for fundamental event watchers will be Friday. On Friday, at 12:30 GMT the US will release the country's monthly employment data. Later on, at 14:00 GMT, the US ISM Services Purchasing Managers Index is set to be out.
Most impact is expected from the US employment data release. The release will consist of the US Average Hourly Earnings, Non-Farm Employment Change and the Unemployment Rate.
USD/JPY short-term review
If the SMA manages to hold and a surge follows, the rate could once again reach the 110.40 level and test its resistance. Above the 110.40 mark, the 110.50 level and the zone above it might provide resistance.Meanwhile, a decline below the SMA could look for support in the weekly simple pivot point at 109.86. However, note that previously the pivot point failed to provide support. Due to that reason, a potential decline would most likely find support in the 109.60 level.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, the pair has broken the resistance of the channel down pattern, which has guided the rate down since the start of July. Moreover, the pair broke the resistance of the 55-day simple moving average, which has been providing resistance to the pair since August 18.A potential target for the rate on the daily candle chart is the July and August high level zone that starts at 110.60.
Daily chart
Since Monday, traders on the Swiss Foreign Exchange were 69% short on USD/JPY.
On Thursday, the sentiment was 68% short.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 58% to sell.