The break out of the USD/JPY reached above the previously set target. The rate touched the 110.00 level before it dropped to look for technical support.
The support was found at the 109.60 level. At that level the 55 and 100-hour simple moving averages were located together with a 50.00% Fibonacci retracement level.
During Monday's trading session, the Japanese Yen appreciated 54 pips or 0.50% against the US Dollar. Note, that the US Dollar also depreciated significantly against gold.
The reason for the advance was the announcement from the Chinese government that it would impose tariffs on $60B of the US goods from June 1.
Most likely, the demand for the Japanese Yen and for gold has increased as for the safe-haven assets.
No more data this week
USD/JPY short-term daily review
On Friday morning the rate stopped at the support of the 109.60 level.If the support will force the pair into a surge up, it should test the resistance of the 109.80 level. At that level the 200-hour simple moving average was located.
On the other hand, if the support fails to force a surge, the rate would decline down to the closest by support level. Namely, the 109.32 level, where a pivot point is located at, would be targeted.
Hourly Chart
On the daily candle chart, it can be seen that the rate has fallen below all of the daily chart's simple moving averages. It indicates that the currency pair is oversold.Although, it does not necessarily indicate that the rate will correct itself by moving up. During sharp fundamental moves the currency exchange rate ignores the SMAs. Moreover, they are forced to sharply follow the exchange rate.
Daily chart
On Thursday, 62% of all open position volume on the Swiss Foreign Exchange was in long positions.
By the middle of Friday, the sentiment was 63% long.
These positions had booked profits during the break out to the north.
Meanwhile, trader set up pending orders were mostly bullish, as 55% of pending commands in the 100-pip range were set to buy.