Some downside potential has been prevailing in the market since Monday.
During Thursday morning, the USD/JPY currency pair was testing the support formed by the Fibo 38.20% and the 200-hour SMA.
Economic Calendar
This week, monthly US inflation and retail sales data sets are bound to cause notable reactions, as they have done in the past. Namely, the US Retail Sales on Friday is being released at 12:30 GMT.
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair tried to surpass the support level formed by the Fibo 38.20% and the 200-hour SMA near 106.80. During Thursday morning, the pair continued to test the given support.
Note that the exchange rate is pressured by the 55– and 100-hour SMAs, as well the weekly R1 in the 107.10 area. Thus, some downside potential could prevail in the market, and the rate could target the psychological level at 106.40.
However, if the given support level holds, it is likely that the Japanese Yen could consolidate against the US Dollar within the following trading session.
On the daily candle chart, the exchange rate gained support from the monthly S1 at 105.40.
Meanwhile, the 55-, 100- and 200-day moving averages formed the resistance area in the 107.70/108.25 range.
Daily chart
Note that the exchange rate is pressured by the 55– and 100-hour SMAs, as well the weekly R1 in the 107.10 area. Thus, some downside potential could prevail in the market, and the rate could target the psychological level at 106.40.
However, if the given support level holds, it is likely that the Japanese Yen could consolidate against the US Dollar within the following trading session.
Hourly Chart
On the daily candle chart, the exchange rate gained support from the monthly S1 at 105.40.
Meanwhile, the 55-, 100- and 200-day moving averages formed the resistance area in the 107.70/108.25 range.
Daily chart
Read More: Technical Analysis
Traders are neutral on USD/JPY
Since Wednesday, trader open position volume on the Swiss Foreign Exchange was 50% long.
Traders had been almost neutral since Tuesday.