The USD/JPY was testing the resistance of a 38.20% Fibonacci retracemenet level at 106.86. In addition, the Fibo was strengthened by the resistance of the 55 and 100-hour simple moving averages near 106.80.
Future forecasts were based upon what would happen near the 106.80 mark.
Economic CalendarThere are a couple of minor data releases scheduled for the week.
On Tuesday, the US ISM Non-Manufacturing PMI is set to be released at 14:00 GMT. In addition, a minor move could be caused by the ADP Non-Farm Employment Change.
The week will end with the employment data release from the United States, on Friday at 12:30 GMT.
USD/JPY short-term daily review
During the first days of May, the USD/JPY currency pair tested the 107.40 level and reversed south. During Tuesday morning, the pair was testing the resistance formed by the 55– and 100-hour SMAs, as well the Fibo 38.20% in the 106.80 area.If the given resistance holds, it is likely that a reversal south could occur in the nearest future. Note that the nearest support level—the weekly S1, is located at 106.32.
However, if the exchange rate fails to surpass the 106.60 level, it is likely that the US Dollar could trade sideways against the Japanese Yen in the short term.
Hourly Chart
On the daily candle chart, during the end of April and start of May trading, the currency exchange rate had passed the support of the April low levels at 107.00.
Daily chart
Read More: Technical Analysis
Traders are neutral on USD/JPY
On Tuesday, 52% of trader open position volume on the Swiss Foreign Exchange was in short positions.
The sentiment had become neutral. During the previous week, traders were mostly short.