The USD/JPY recovery has been stopped by the resistance of the 55-hour simple moving average.
The SMA managed to push the rate down to previous low levels. However, On Monday morning, the resistance of the SMA was being tested.
The Federal Reserve released the FOMC Statement, where the US policymakers provided in-depth insights into the economic and financial conditions that influenced their vote on maintaining the Federal Funds Rate unchanged. Note, that FOMC Economic Projections were released at the same time.
The Fed suggested that it would cut the interest rate in 2020. The median target for the federal funds rate remains 2.4% for 2019. Note, that the Federal Reserve has not cut the rate since the financial crisis. However, recent employment data set and inflation data releases have led analysts to forecast cut rates in the future.
Minor US events
The data that is noted by the financial markets as important starts on Wednesday. On that day, the US Durable Goods Orders and Core Durable Goods Orders will be published at 12:30 GMT.
This event since February has caused moves from 3.9 to 16.5 pips. Moreover, the 16.5 pip was an anomaly, as the rest of the events have caused from 3.9 to 7.6 pips.
On Thursday, the US Final GDP will be published at 12:30 GMT. This is the least important GDP of the three quarterly publications of the US GDP. Since March 2018 this event has caused moves from 6.6 pips to 16.5 pips.
The full review of all of the notable events is available in video on the Dukascopy Webinars YouTube channel.
USD/JPY short-term daily review
The USD/JPY recovery has been stopped by the 55-hour simple moving average at the 107.70 level. On Monday, the pair and the technical resistance level were both located near the 107.40 level.In general, it was expected that the pair will be pushed by the simple moving average down into the support of the monthly pivot point at 107.14 level.
If the given resistance does not hold, it is expected, that the pair could reach the 107.87 mark, where the resistance level formed by the 55-hour SMA and the weekly S2 is located.
Meanwhile, if the 55-hour SMA fails to push the pair down and the pair breaks above it, it will face no technical resistance levels as high as the 107.70 level, where this week's middle pivot point was located at.
Hourly Chart
On the daily candle chart, the drops were still in the borders of the long term descending channel pattern.
Moreover, the pair still has room for a decline, as the lower trend line of the pattern was located just above the 106.50 level.
Daily chart
Since the middle of Thursday's London trading session on the Swiss Foreign Exchange 74% of open USD/JPY position volume was in long positions.
The sentiment had changed by the middle of Monday's London trading, as 72% of volume was in long positions.
Despite the drop, traders have stuck to being long on the pair. If these position have been open before Thursday, they are in the red.
Meanwhile, trader set up pending orders were mostly bearish, as 55% of pending commands in the 100-pip range were set to sell. The orders had not changed since Friday.