On Wednesday morning, the rate began to trade sideways between 108.50 and 108.60, as it was expected to remain stable until the Federal Reserve Interest Rate announcement at 18:00 GMT.
Federal Reserve at 18:00 GMT
This week top attention will be paid to the US Federal Reserve's Federal Open Markets Committee announcements on Wednesday at 18:00 GMT.
In general, the markets expect a US Dollar interest rate cut. Besides that each monetary policy announcement since November 2018 has caused a move on the USD/JPY in the range from 14.0 to 52.1.
In addition, note that the financial media might comment and look at the US ADP Non-Farm Employment Change that is scheduled to be published on Wednesday at 12:15 GMT.
However, historical data reveals that during the time period of five minutes before the release and five minutes afterwards the EUR/USD has moved from 7.5 to 15.2 pips since August 2018.
On Thursday, the ISM Manufacturing PMI will be published at 14:00 GMT. This event has caused moves from 14.9 to 24.3 base points.
On Friday, the US employment data will be published. It will consist of the US Average Hourly Earnings, Non-Farm Employment Change and the official Unemployment Rate. This release has caused moves from 13.4 to 38.9 base points.
USD/JPY short-term daily review
On Wednesday morning, the USD/JPY rate traded below the resistance of the 100-hour simple moving average, which was located at 108.60. In the meantime, the rate did not fluctuate below 108.50.The rate was expected to decline, as the Federal Reserve was expected to cut interest rates. Most economic calendars indicated that a rate cut will occur. Note that since 2007 the forecasts of Federal Reserve rate cuts or hikes have been correct.
In general, a rate cut in theory should cause the USD to drop on all charts.
Hourly Chart
On the daily candle chart, the rate has come close to the upper trend lines of two dominant patterns. In general, the monthly pivot point, which is located at the 108.90 is the last resistance before the two trend lines.
Meanwhile, note that the rate has additional technical support from the 55-day simple moving average at 108.51.
Daily chart
Read More: Technical Analysis
Traders are long on USD/JPY
On Wednesday, 69% of total open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up pending orders were neutral, as in the 100-pip range 51% of pending orders were set to sell and 49% were to buy.