The USD/JPY managed to break the resistance line, which guided it down since early February 18. However, the following surge was almost immediately stopped by the resistance of the 55-hour simple moving average.
At mid-day on Tuesday, the USD/JPY bounced off the SMA and sharply declined below the support of the 108.75/108.80 support zone, the weekly S1 simple pivot point and the 108.50 mark.
Economic Calendar
On Wednesday, at 13:45 GMT the US Services and Manufacturing PMIS could cause moves from 3.0 to 28.6 pips. However, note that the 28.6 pip move in November was an anomaly. Without it, the range is 3.0 to 7.6 pips.
On Thursday, the US Final GDP is set to be released at 12:30 GMT. The event has caused moves from 4.5 to 38.9 pips since December 2019. Although, without the March 2020 move of 38.9 pips, the range is insignificant. Namely, 4.5 to 8.5 pips.
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USD/JPY short-term daily review
In the case of the decline continuing, the currency exchange rate could look for support in the 50.00% Fibonacci retracement level at the 108.35 level. This level provided support on March 10 and 11.On the other hand, the rate could consolidate above a round exchange rate level by fluctuating.
Hourly Chart
On the daily candle chart, the rate recently bounced off the upper trend line of a large scale channel up pattern. The pattern was added to the chart on Monday.
Daily chart
On Tuesday, traders were 75% short on USD/JPY. On Monday, the sentiment was 72% short.
The Swiss Foreign Exchange open positions have been mostly short for more than three weeks. It appears that traders expect a larger retracement back down.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 71% to buy.