The USD/JPY has declined to and pierced the support of the 38.20% Fibonacci retracement level at 108.44.
The piercing of the Fibonacci retracement level and the fact that the pair is being approached by the resistance of the 55 and 100-hour SMAs signal that a decline is highly likely.
On Wednesday, the FOMC Meeting Minutes are set to be published at 19:00 GMT. Since April, the rate has moved from 7.7 to 15.3 pips in the five minutes following the release.
The week's reaction tables have been published. Take a look at the 18.11-22.11 Event Historical Reactions publication.
Read More: 18.11-22.11 Event Historical Reactions
USD/JPY short-term daily review
As stated in the intro, the rate is expected to decline, as it has pierced the Fibo at 108.44 and is being approached by hourly SMAs at 108.64.A decline would reach for the support of the weekly S1 of the simple pivot points at 108.28.
On the other hand, the rate might trade sideways, as the hourly SMAs were 20 pips above the rate on Wednesday mid-day and need time to push the pair down.
Hourly Chart
On the daily candle chart, the rate has passed the support of the channel up pattern. It is a signal that the large scale surge of the USD/JPY is over.
In the meantime, the rate was expected to be influenced by the support of the 55 and 100-day SMAs at 108.15 and 107.70. Moreover, the resistance of the 200-day SMA was located near 109.00.
Daily chart
Read More: Technical Analysis
Short sentiment increases
Since Friday, 58% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the short volume increased to 60%.
Meanwhile, trader set up pending orders were bullish. In the 100-pip range 57% of pending orders were to buy and 43% were to sell.
On Tuesday, 57% of orders were to sell.