The squeeze of the rate between the 55-hour SMA and a pivot point ended, as the Bank of Japan released a monetary policy announcement.
The announcement caused a break out of the USD/JPY down by strengthening the value of the Japanese Yen. By the middle of the day, the rate had recovered by finding support in the 200-hour SMA.
The week's scheduled event historical data tables have been published. Click on the link below to read the article.
Read More: 20.01-24.01 Event Historical Reactions
USD/JPY short-term daily review
By the middle of Tuesday's London trading hours, the USD/JPY had reached the resistance of the 100-hour simple moving average near 110.08.If the 100-hour SMA would fail to keep the rate down, the pair would next reach for the 55-hour SMA at 110.13 and the pivot point at 110.25.
On the other hand, in the case of the resistance holding, the pair would look for support in the weekly pivot point at 110.00 and the 200-hour SMA at 109.90.
Hourly Chart
As apparent on the chart, the pair passed the resistance of the 50.00% Fibo and the trend line of the 2018 and 2019 high levels. The rate continues to surge in the aftermath of the breaking of those levels.
However, the pair has left far below it the daily simple moving averages, which is an overbought signal. Due to that reason the rate should consolidate by trading sideways or declining.
Daily chart
Read More: Technical Analysis
Short sentiment decreases
Since Friday, 73% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
The situation changed on Tuesday, as the short sentiment had decreased to 71%.
Meanwhile, in the 100-pip range 78% of pending orders were to sell and 22% were to buy. The orders had not changed since Monday.