During Monday morning, the USD/JPY currency pair was testing the support level formed by the weekly S1 and the monthly PP at 108.90.
If the given level holds, it is likely that a reversal north could occur within the following trading session.
On Tuesday, minor spike in volatility could occur due to the US Durable Goods Orders Release at 13:30 GMT. This event has caused moves on the USD/JPY charts from 5.8 to 11.7 pips since July 2019.
On Wednesday, the US Federal Funds Rate is scheduled to be published at 19:00 GMT. The event has caused moves from 11.2 to 37.2 pips.
Note that the largest moves occurred during rate cuts. This time, no rate cut is expected. Due to that reason a move of around 10 pips can be expected.
On Thursday, the US Advance GDP publication at 13:30 GMT is set to occur. The event has caused moves from 11.1 to 31.2 pips since October 2018.
Next week's event historical data tables have been published. Click on the link below to read the article.
Read More: 27.01-31.01 Event Historical Reactions
USD/JPY short-term daily review
During previous trading day, the USD/JPY currency pair tumbled to the 108.80 level. During Monday morning, the pair reversed north.On the one hand, the exchange rate could gain support of the weekly S1 and monthly PP at 108.90 and extend gains in the nearest future. In this case it is unlikely that the rate could exceed the Fibonacci 50.00% retracement at 109.58.
On the other hand, note that the currency pair is pressured by the 55-hour moving average, currently located at 109.40. Thus, the pair could maintain its decline in the short run. A possible downside target is the Fibonacci 38.20% retracement at 108.44.
Hourly Chart
On the daily candle chart, the most recent decline has erased some of the overbought pressure that could be seen by observing that the rate had left far below it the daily simple moving averages.
As apparent on the chart, the rate tumbled below the 55-day moving average. However, the rate could gain support of the 100- and 200-hour moving averages.
Daily chart
Read More: Technical Analysis
Traders could go long
On Monday, 60% of open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, in the 100-pip range 62% of pending orders were to sell and 38% were to buy.