Despite having no resistance, the USD/JPY did not surge on Thursday. Instead, it retreated to the lower trend line of a rising wedge pattern, which eventually was broken.
On Friday morning, the rate had bounced off the support of the 200-hour SMA below 107.40 and traded near 107.50.
Economic Calendar
Next week, there is one notable time to watch the economic calendar. At 12:30 on Thursday, a group of various US data sets will be published.
Each one of these data sets on their own can cause a move of about ten pips. Combined, the move could total to up to 30 pips.
USD/JPY short-term daily review
It is unlikely that some upside potential could prevail in the market due to the resistance cluster formed by the 55– and 100-hour SMAs, as well the weekly R1 and monthly PP in the 107.58/107.71 range.
From a theoretical point of view, it is likely that the exchange rate could trade upwards within the given pattern. In this case the rate could exceed the 108.00 level.
It is likely that the exchange rate could gain support from the 200-hour SMA near 107.40 and trade sideways. If the given support does not hold, the rate could decline to the weekly PP at 107.14.
On the daily candle chart, the exchange rate has retreated back below the 55-day simple moving average. It appears that the SMA can no longer impact the rate.
Daily chart
From a theoretical point of view, it is likely that the exchange rate could trade upwards within the given pattern. In this case the rate could exceed the 108.00 level.
It is likely that the exchange rate could gain support from the 200-hour SMA near 107.40 and trade sideways. If the given support does not hold, the rate could decline to the weekly PP at 107.14.
Hourly Chart
On the daily candle chart, the exchange rate has retreated back below the 55-day simple moving average. It appears that the SMA can no longer impact the rate.
Daily chart
Read More: Technical Analysis
Short sentiment stops growth
On Tuesday, trader open position volume on the Swiss Foreign Exchange was 54% short. On Wednesday, the sentiment was 56% short.
By the middle of Thursday's trading, 60% of volume was short.
The trend of the short sentiment growing stopped on Friday, as 59% of volume was short.