USD/JPY recovers after Fed hike

Note: This section contains information in English only.
Source: Dukascopy Bank SA
The United States Federal Reserve hiked its Federal Funds Rate by 0.50%. The market consensus forecast was a 0.50% hike, which has brought the rate from 4.00% up to 4.50%. The initial rate hike caused a surge of the US Dollar, drop of the equity markets and surge of peer currencies. The event was followed by the press conference of the Chairman of the US Fed. As the head of the central bank made his speech, the initial move extended and the US Dollar surged, moving the rest of the markets down.

On the USD/JPY charts the event has caused a recovery. By the middle of Thursday's trading, the pair had reached the 137.00 mark. During the surge, the rate ignored the resistance of the 50, 100 and 200-hour simple moving averages and the weekly simple pivot point.

Economic Calendar



On Thursday, at 13:30 GMT, the US Retails Sales data and Empire State Manufacturing Index might cause an adjustment in the value of the US Dollar.

The week will end with the publication of Markit Services and Manufacturing sector Purchasing Managers Index survey data at 14:45 GMT.

Hourly Chart
A continuation of the surge might be slowed down by the 137.50 mark, before approaching the resistance zone at 137.85/137.95. On the other hand, a decline could look for support in the 136.00 and 135.50 levels.

USD/JPY daily chart's review

On the daily candle chart, note that the 200-day simple moving average at 137.40. The SMA is acting as resistance and appears to have forced the pair down.
Daily chart



Traders are still short

Prior to the CPI, on the Swiss Foreign Exchange, traders were 60% short, as that amount of open position volume was in short positions.

Meanwhile, trader set up pending orders in the 100-pip range around the rate were 56% to buy the USD against the JPY.

Prior to the Fed, the sentiment was 59% short and pending orders were 50% to buy and 50% to sell.

On Wednesday, 57% of volume was short and orders were 76% to buy.

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