On Friday morning, the USD/JPY currency pair was testing the resistance level formed by the weekly R1 and the monthly R2 at 110.25.
If the given resistance holds, it is likely that some downside potential could prevail.
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Read More: 20.01-24.01 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair traded upwards. During Friday morning, the rate was testing the resistance level formed by the weekly R1 and the monthly R2 at 110.25.If the given resistance holds, it is likely that a reversal south could occur in the nearest future. In this case the currency pair could gain support of the 55– and 100-hour SMAs at the 110.00 area.
If the given support holds, it is likely that that the US Dollar could consolidate against the Japanese Yen in the nearest future. Otherwise, it is likely that the exchange rate could target the 109.80 level.
Hourly Chart
As apparent on the chart, the pair surpassed the resistance of the 50.00 Fibo and the trend line of the 2018 and 2019 high levels.
Given that the pair is supported by the 55-day SMA, it is likely that some upside potential could prevail in the market.
Daily chart
Read More: Technical Analysis
Sentiment remained unchanged
On Friday, 73% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 74% of pending orders were to sell and 26% were to buy.