The support of the 107.50 level held on Monday, as the pair traded between the 107.50 and 108.50 levels.
In the meantime, as the rate traded sideways it was approached by the resistance of the 55-hour simple moving average, which began to push the pair down.
US ISM Manufacturing PMI
The Institute for Supply Management (ISM) released the US ISM Manufacturing PMI survey results, which came out worse-than-expected of 50.1 compared with the forecast of 50.5.
Timothy R. Fiore, the Chair of the Institute for the ISM Manufacturing Business Survey Committee commented: "Global supply chains are impacting most, if not all, of the manufacturing industry sectors. Among the six big industry sectors, Food, Beverage & Tobacco Products remains the strongest, followed by Computer & Electronic Products. Petroleum & Coal Products is the weakest. Overall, sentiment this month is marginally positive regarding near-term growth."
Economic CalendarSome 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, the week's data is available. Click on the link below to see the historical data tables with the reactions to various events.
USD/JPY short-term daily review
On Monday, the USD/JPY currency pair tried to exceed the Fibo 38.20% at 108.44. During today's morning, the pair was trading in the 108.00 area.Given that the exchange rate is pressured by the 55-hour SMA near 108.10. Thus, some downside potential could prevail in the market. In this case the rate could gain support of the Fibo 23.60% at 107.02.
However, if the currency pair fails to surpass the 107.50 level, 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 109.09.
Hourly Chart
On the daily candle chart, the rate has broken the support of the 200-day simple moving average. There is no additional support on the chart, which could stop a decline to the 107.00 level.
Daily chart
On Monday, 51% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
By the middle of London trading hours, the sentiment had become 54% long.
Meanwhile, in the 100-pip range 60% of pending orders were to buy and 40% were to sell.