In general, a retracement down is expected to occur, which should be followed by a continuation of the surge up.
Economic Calendar On Tuesday, the US ISM Manufacturing PMI is set to be released at 14:00 GMT. The event has caused moves from 13.9 to 29.0 pips on the rate. Note that the largest reaction was on the September release.
On Wednesday, the ADP Non-Farm Employment Change is set to be published at 12:15 GMT. This release has lost its significance during the last year, as it has caused moves from 5.2 to 19.0 pips since October 2018.
On Thursday, at 14:00 GMT the ISM Non-Manufacturing PMI is scheduled to be published. This release has caused rate adjustments on the USD/JPY from 8.0 to 27.3 pips since September 2018.
The week will end with the biggest event of the month in the US, the employment data publication, on Friday at 12:30 GMT. The release will consist of three data sets being published. The Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
The Average Hourly Earnings is the top number to watch. It is closely followed in importance by the Non-Farm Employment change. Meanwhile, the Unemployment Rate can be ignored by financial traders.
The event has caused moves from 13.4 to 38.9 pips since May 2019.
All of the historical reaction data tables to all notable data releases have been published in a separate publication. To see the publication, click on the link below.
Read More: 30.09-06.10 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair advanced and reached the 108.20 level. During Tuesday morning, the pair tested the upper boundary of the rising wedge pattern at 108.40.From a theoretical point of view, it is likely that the US Dollar consolidate against the Japanese Yen within the given pattern. It is unlikely that a breakout south could occur due to the support formed by the 55-hour SMA at 108.03.
However, if the given support does not hold, it is likely that the exchange rate could decline to the support cluster formed by the 100– and 200-hour SMAs, as well the weekly PP in the 107.71/107.87 range.
Hourly Chart
On the daily candle chart, the surge of the rate is consistent with the ascending channel pattern. Moreover, the recent surge was supported by the 100-day simple moving average, which pushed the rate up on Monday.
Meanwhile, take into account that the rate is set to face the resistance of the 200-day SMA, which on Tuesday was located near the monthly R1 at 109.14.
Daily chart
Read More: Technical Analysis
Traders are long
On Tuesday, 57% of open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were bearish. Namely, in the 100-pip range 67% of pending orders were set to sell and 33% were to buy.
Previously, 55% of orders were to sell.