On Wednesday, the the USD/JPY currency pair was squeezed 55-, 100- and 200-hour moving averages.
If the given moving averages hold, it is likely that the pair could trade sideways in the 108.80 area in the nearest future.
Economic Calendar
This week there are a couple of events that could impact the rate.
On Wednesday, at 13:30 GMT the US CPI and Core CPI are scheduled to be published. Since July this event has caused moves from 11.4 to 28.4 pips.
On the same day, the US Federal Reserve would announce its interest rate at 19:00 GMT. The event has created moves from 12.6 to 52.1 pips.
The week is set to end with the US Retail Sales data on Friday at 13:30 GMT. A move from 8.7 to 25.4 pips can be expected.
Meanwhile, the week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 09.12-13.12 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair raised to the 108.80 level. During Wednesday morning, the pair was testing the support provided by the 55– and 100-hour SMAs circa 108.67.If the given moving averages hold, it is likely that some upside potential could prevail in the market. In this case the exchange rate could face resistance of the 200-hour SMA, as well the weekly PP at 108.93.
If the given resistance holds, it is likely that the Greenback could trade sideways against the Japanese Yen in the short term. Also, it is unlikely that bears could prevail, and the pair could drop lower than the Fibo 38.20% at 108.44.
Hourly Chart
On the daily candle chart, the 38.20% Fibonacci retracement at the 108.43 level was strengthened by the 55-day simple moving average.
In the meantime, the 200-day SMA was pierced by the rate at the 108.90 level.
These factors indicate that the 55-day SMA could push the rate through the resistance of the 200-day SMA. Namely, the daily chart contradicts the hourly chart.
Daily chart
Read More: Technical Analysis
Short sentiment increases
On Wednesday, 71% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, trader set up pending orders were to sell. In the 100-pip range 63% of pending orders were to sell and 37% were to buy.