The USD/JPY has plummeted down to the 108.50 level. Despite a decline being expected by Dukascopy Analytics, the sharpness of the decline was not forecast.
On Friday, the rate appeared to be finding support in the 108.50 level, which was strengthened by a weekly pivot point at 108.58.
Economic CalendarNext week, already on Monday, a data release could cause a notable move.
The US ISM Manufacturing PMI is scheduled to be published at 15:00 GMT. This event has caused moves from 20.0 to 44.5 pips since October.
Some might consider watching the ADP Non-Farm Employment Change on Wednesday at 13:15 GMT. This event has caused moves from 3.2 to 15.1 pips.
On Wednesday, at 15:00 GMT the US ISM Non-Manufacturing PMI is set to be published. Last year, this event caused moves from 18.8 to 56.6 pips. This year, there were two moves of 5.6 and 13.9 pips.
On Friday, the US employment data will be released at 13:30 GMT. The event has caused moves from 19.5 to 49.8 pips since October.
This event consists of three data sets – the Unemployment Rate, Non-Farm Employment Change and the Average Hourly Earnings.
Meanwhile, next week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
Read More: 02.03-06.03 Event Historical Reactions
USD/JPY short-term daily review
If the rate passes the support of the 108.50 level, which is strengthened by a 38.20% Fibonacci retracement level and a weekly pivot point at 108.58, it would plummet, as it has no support.Namely, the most close by level, that could pause a decline was the 108.00 mark. Below it, a pivot point was located at 107.50.
However, the rate is oversold. It is indicated by the fact that the hourly simple pivot points were located above the 110.00 level.
Hourly Chart
On the daily candle chart, the rate has additional support in the form of the 200-day simple moving average, which on Friday was located at the 108.40 level.
In the meantime, the rate had removed the overbought pressure of the February spike and had returned to trade near January levels.
Daily chart
Read More: Technical Analysis
The decline of short sentiment continues
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.
By the middle of Thursday's trading, the sentiment was 63% short, and, on Friday, 57% were short.
In general, sellers have been taking profits from the decline.
Meanwhile, in the 100-pip range 54% of pending orders were to sell and 46% were to buy.