After three attempts to push the USD/JPY down the 55-hour simple moving average failed. By the middle of Wednesday's trading, the USD/JPY had begun a surge to the 108.40 level.
The rate was expected to meet with the resistance of a Fibonacci retracement level and 100-hour SMA near 108.40.
Bureau of Economic Analysis released the US Prelim GDP data, which came out in line with expectations of 3.1%.
According to the official release: "Today's estimate reflects downward revisions to non-residential fixed investment and private inventory investment and upward revisions to exports and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up; the general picture of economic growth remains the same."
On Wednesday, a minor move might be caused by the ISM Non-Manufacturing PMI at 14:00 GMT.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
USD/JPY short-term daily review
On Tuesday, the USD/JPY currency pair traded sideways, trying to surpass the resistance of the 55-hour SMA, currently located at 108.14. During today's morning, the pair surpass the given resistance.Note, that the exchange rate is pressured by the 100-hour moving average, currently located at the 108.57 mark, thus, it is unlikely, that some upside potential could prevail in the market in the short term.
It is expected, that the rate could trade sideways between the given moving averages in the nearest future.
Also, it is unlikely, that the pair could decline lower than the 107.80 level due to the support of a pivot point at that level.
Hourly Chart
On the daily candle chart, a descending channel pattern can be observed. Its lower trend line is strengthening the support of the pivot point at 107.73.Daily chart
Since Tuesday, the Swiss Foreign Exchange sentiment was 73% long. Namely, 73% of open USD/JPY position volume was in long positions.
Meanwhile, trader set up pending orders were also long, as 55% of pending commands in the 100-pip range were set to buy.
In general, it appeared that since Tuesday despite the USD/JPY reaching new low levels traders were going long, as they expected a surge of the rate.
On Wednesday, they were profiting from this.