Instead of consolidating its gains, the USD/JPY continued to surge higher on Tuesday. The surge continued until the rate approached the resistance of the 108.80 mark.
By the middle of Wednesday's GMT trading hours, the pair was testing the 108.80 mark, which continued to hold.
Economic Calendar
On Wednesday, June 3, two macroeconomic events from the US are expected: the ADP Non-Farm Employment Change at 12:15 GMT and the ISM Non-manufacturing PMI at 14:00 GMT.
The week will end with the US Employment data set release on Friday 12:30 GMT.
USD/JPY short-term daily review
It is likely that the exchange rate could gain support from the weekly R2 and the monthly R1 in the 108.60 area. Thus, some upside potential could prevail in the market.
Note that the currency pair could face the resistance level—the weekly R3 at 109.07. If the given level holds, it is likely that the US Dollar could consolidate against the Japanese Yen in the short run.
On the daily candle chart, the pair has pierced the resistance of the 100 and 200-day simple moving averages at the 108.30 level.
Daily chart
Note that the currency pair could face the resistance level—the weekly R3 at 109.07. If the given level holds, it is likely that the US Dollar could consolidate against the Japanese Yen in the short run.
Hourly Chart
On the daily candle chart, the pair has pierced the resistance of the 100 and 200-day simple moving averages at the 108.30 level.
Daily chart
Read More: Technical Analysis
Short sentiment decline continues
On Friday, trader open position volume on the Swiss Foreign Exchange was 67% short. On Monday, the sentiment was 64% short
During Tuesday's GMT trading hours, the sentiment was 57% short. On Wednesday, the sentiment was 54% short.
As the rate surged, traders closed their short positions.