The squeeze of the USD/JPY between the 55 and 100-hour simple moving averages, as expected, resulted in a break out. The exchange rate broke out to the downside and reached the 108.60 level, exceeding expectations.
By the middle of Friday's GMT trading hours, the pair was located between the resistance of the mentioned SMAs near 109.00 and the support of a pivot point at 108.90.
Relevant data publications will resume on Monday. At 15:00 GMT the US ISM Manufacturing PMI could cause a move on the USD/JPY from 20.0 to 49.5 pips.
On some calendars, on Wednesday, the ADP Non-Farm Employment Change is shown as a high impact data set. Note that our analysts ignore it, as, for example, on the USD/JPY charts it has caused moves from 3.2 to 19.0 pips since September.
On the same day, the US ISM Non-Manufacturing PMI is scheduled to be released at 15:00 GMT. This event has caused moves from 18.8 to 56.6 pips.
Last but not least, US employment data sets are scheduled to be published on Friday at 13:30 GMT. Moves from 19.5 to 49.8 pips have been caused by this event since September 2019.
The week's event historical data tables have been published. Click on the headline below to read the article.
Read More: 03.02.-07.02 Event Historical Reactions
USD/JPY short-term daily review
Note that the exchange rate is pressured by the 55– and 100-hour moving averages, currently located at 109.00. Thus, some downside potential could prevail in the market, and the rate could reach for the 108.50 level.On the other hand, the currency pair could gain support of the weekly S1 and the monthly PP at 108.90 and go upwards. In this case the pair could reach the 200-hour SMA near 109.30.
Hourly Chart
On the daily candle chart, the pair appears to be squeezed in between the 55 and 100-day simple moving averages that are located at 109.15 and 108.73.
Meanwhile, note that the 100-day SMA was pierced on Thursday and the 55-day SMA was pierced on Wednesday. The rate is making false break outs from the squeeze.
Daily chart
Read More: Technical Analysis
Traders are short on USD/JPY
On Friday, 73% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range 60% of pending orders were to sell and 40% were to buy.