On Thursday, the USD/JPY broke a technical resistance cluster at 109.60. The event was followed by a surge up to the 109.80 level.
The rate was expected to continue to surge, as it faced no technical resistance as high as the 109.90 level, where the 200-hour simple moving average was located at.
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 tarrifs 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
The rate has broken the resistance of a strong technical level cluster near 106.60. Afterwards, the rate continued to surge up to the 109.80 level.The rate was expected to continue its surge until it reached the 109.90 level. At that level it is expected to meet with the resistance of the 200-hour simple moving average.
On the other hand, the rate might fail to pass the 109.80 level, as historically it had provided enough resistance to the USD/JPY to force it into a decline.
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.
These positions had booked profits during the break out to the north.
Meanwhile, trader set up pending orders were mostly bullish, as 61% of pending commands in the 100-pip range were set to buy.