The USD/JPY reached the 108.00 mark, which held its ground and caused a decline of the pair. In fact, the pair made two attempts to pass the 108.00 level and failed.
By mid-day GMT trading hours on Wednesday, the rate had declined to the support of the 55-hour simple moving average at the 107.55 level.
Economic Calendar
Markit is going to publish the US Flash Manufacturing PMI survey results on Thursday, May 21, at 13:45 GMT. This is the only data release this week, which could impact the USD/JPY through the strength of the USD.
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair re-tested the upper line of a rising wedge pattern at 108.00. During Wednesday morning, the pair reversed south.
From a theoretical point of view, it is likely that the exchange rate could re-test the lower pattern line in the 107.45 area in the nearest future. If the given pattern holds, a reversal north could follow.
Meanwhile, note that the currency pair could face the support from the 55-hour SMA at 107.55. Thus, a reversal north could occur sooner, and the pair could continue to trade upwards within the given pattern.
On the daily candle chart, the exchange rate has passed the resistance of the 55-day simple moving average, which kept the pair down since May 10.
In theory, next resistance on the daily candle chart for the pair are the 100 and 200-day SMAs near 108.30.
Daily chart
From a theoretical point of view, it is likely that the exchange rate could re-test the lower pattern line in the 107.45 area in the nearest future. If the given pattern holds, a reversal north could follow.
Meanwhile, note that the currency pair could face the support from the 55-hour SMA at 107.55. Thus, a reversal north could occur sooner, and the pair could continue to trade upwards within the given pattern.
Hourly Chart
On the daily candle chart, the exchange rate has passed the resistance of the 55-day simple moving average, which kept the pair down since May 10.
In theory, next resistance on the daily candle chart for the pair are the 100 and 200-day SMAs near 108.30.
Daily chart
Read More: Technical Analysis
Short sentiment increases
On Tuesday, trader open position volume on the Swiss Foreign Exchange was 54% short.
By the middle of Wednesday's GMT trading the sentiment was 56% short.