On Friday morning, the USD/JPY currency exchange rate pierced the support of the 108.00 level. It was an indicator that the rate could reach new low levels.
However, the recent decline occurred in a very sharp angle, which indicated that the pair is already oversold.
Next week, data releases will start on Tuesday at 15:00 GMT. The US ISM Non-Manufacturing PMI will be released at that time. This event has caused moves from 8.0 to 56.6 pips on the USD/JPY.
On Wednesday, the ADP Non-Farm Employment Change is scheduled to be released at 13:15 GMT. Dukascopy analytics dropped the cover of the ADP due to it not causing increases of volatility.
However, the last release caused a move on the EUR/USD above ten pips. It is the criteria whether to take or not take into account a data release.
The week will end with the three US employment data sets being published at 13:30 GMT. Since August 2019, the USD/JPY has moved from 26.7 to 49.8 pips on the release.
Next week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 06.01-10.01 Event Historical Reactions
USD/JPY short-term daily review
On Friday morning London trading hours, the USD/JPY reached below the 108.00 level. The event signalled that the decline of the pair can be expected to continue. In that case the next technical support level should be reached. The next support is the weekly S2 simple pivot point at 107.65 level.On the other hand, as the pair has experienced big losses during the week, it could consolidate by piercing the S1 pivot point's resistance at 108.17 and surging to a 38.20% Fibonacci retracement level at 108.44.
Hourly Chart
On the daily candle chart, the rate has dropped more than expected, as it has retreated below the 38.20% Fibonacci retracement level at 108.44 and the 100-day simple moving average.
Due to that reason the pair has no technical support on the daily candle chart as low as a 23.60% Fibonacci retracement level at 107.00.
Daily chart
Read More: Technical Analysis
Traders remain short
On Thursday, 72% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions. The sentiment was 71% short on Friday.
Previously, trader set up pending orders were slightly bullish. In the 100-pip range 58% of pending orders were to buy and 42% were to sell.
On Friday, 72% of orders were to sell. It appears that traders were waiting for the rate to reach a certain level before going short.