The USD/JPY currency exchange rate had reached the 110.00 level on Tuesday. From this level, the pair rebounded to test the resistance levels that were located above 110.50.
The future scenarios were based upon what would happen at the technical resistance levels.
Economic CalendarDuring the week there are no notable events that might impact the currency exchange rate. However, some economic calendars have US events listed as high impact.
On Thursday, at 15:30 GMT the US Durable Goods Orders are set to be published. This event has caused moves from 3.9 to 9.4 pips since August.
Moreover, the 9.4 pip move was an anomaly caused by the simultaneous release of other data together with the Durable Goods orders. Without it, the range is from 3.9 to 7.3 pips.
At the same time, the US Preliminary GDP is scheduled to be published. This is the other data set that together with the Durable Goods orders caused a 9.4 pip move. Without the other data, the GDP has caused moves from 2.8 to 9.6 pips.
The week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
Read More: 24.02-28.02 Event Historical Reactions
USD/JPY short-term daily review
Note that the exchange rate is pressured by the 55– and 200-hour SMAs near 110.70. Thus, some downside potential could prevail in the market, and the rate could target the Fibo 50.00% at 109.58.However, if the weekly S1 holds, it is likely that the US Dollar could trade sideways against the Japanese Yen in the short term. Also, it is unlikely that bulls could prevail, and the pair could exceed the weekly PP at 111.15.
Hourly Chart
On the daily candle chart, the rate is retreating back down to the support of the daily simple moving averages. By retracing back down the rate is getting rid of the overbought pressure that appeared during the February 19 and 20 surge.
Daily chart
Read More: Technical Analysis
Short sentiment decreases
On Tuesday, 72% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
On Wednesday, the sentiment decreased to 68% short.
Meanwhile, in the 100-pip range 50% of pending orders were to buy and 50% were to sell. Previously, 55% of orders were to buy.
It can be assumed that a part of short sellers has taken profits.