In general, the rate is expected to trade sideways until the 100-hour simple moving average approaches from above.
Latest Fundamental Event Report
Institute for Supply Management released the US Non-Manufacturing PMI data, which came out worse-than-expected of 53.7 compared with the forecast of 55.5.
Anthony Nieves, Chair of the Institute for Supply Management (ISM) Non-Manufacturing Business Survey Committee commented: "The NMI registered 53.7 percent, which is 1.4 percentage points lower than the June reading of 55.1 percent. This represents continued growth in the non-manufacturing sector, at a slower rate. This is the index's lowest reading since August 2016, when it registered 51.8 percent. Respondents indicated ongoing concerns related to tariffs and employment resources. Comments remained mixed about business conditions and the overall economy."
No data for USD/JPY this week
During this week there will be no more macroeconomic data releases that might impact the USD/JPY.
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair consolidated within the cluster formed by the monthly S2 and S3, located at 106.54 and 105.87 respectively. During Wednesday's morning, the pair was still trading sideways.Theoretically, it is unlikely, that some downside potential could occur, as the exchange rate is supported by the lower boundary of the long-term descending channel at 105.87.
Also, it is unlikely, that bulls could prevail in the market in the short run due to the resistance of the 100-hour SMA, currently located at 106.70.
If the given cluster holds, it is likely, that the pair could maintain its consolidation within the following trading session.
Hourly Chart
On the daily candle chart, the rate has bounced off in a sharp move off the upper trend lines of dominant patterns. The move was expected to occur a lot slower.
Moreover, the move broke the junior pattern without pausing at its lower trend line.
In general, the rate is expected to trade sideways in the borders of the large scale descending pattern.
Daily chart
On Tuesday, 73% of total open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
By the middle of Wednesday's trading session traders had increased the long position proportion, as 75% of open position volume was in long positions.
Meanwhile, trader set up pending orders were neutral, as in the 100-pip range 51% of pending orders were set to buy and 49% were to sell.
Previously, 61% of orders were set to buy.