On Tuesday, the USD/JPY traded sideways with high volatility, as it had also done on Monday.
Meanwhile, the rate had been approached by the 55-hour simple moving average, which should provide resistance to the rate.
On Tuesday, minor spike in volatility could occur due to the US Durable Goods Orders Release at 13:30 GMT. This event has caused moves on the USD/JPY charts from 5.8 to 11.7 pips since July 2019.
On Wednesday, the US Federal Funds Rate is scheduled to be published at 19:00 GMT. The event has caused moves from 11.2 to 37.2 pips.
Note that the largest moves occurred during rate cuts. This time, no rate cut is expected. Due to that reason a move of around 10 pips can be expected.
On Thursday, the US Advance GDP publication at 13:30 GMT is set to occur. The event has caused moves from 11.1 to 31.2 pips since October 2018.
Next week's event historical data tables have been published. Click on the link below to read the article.
Read More: 27.01-31.01 Event Historical Reactions
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair tried to surpass the support level formed by the weekly S1 and the monthly PP at 108.90. During today's morning, the rate continued to test the given level.Note that the exchange rate is pressured by the 55-hour moving average, currently located at 109.14. Thus, bears could prevail in the market in the nearest future. A possible downside target is the Fibo 38.20% at 108.44.
However, if the given support level holds, it is likely that the US Dollar could continue to consolidate against the Japanese Yen in the short run. Also, it is unlikely that bulls could prevail, and the rate could exceed the monthly R1 at 109.47.
Hourly Chart
On the daily candle chart, the most recent decline has erased some of the overbought pressure that could be seen by observing that the rate had left far below it the daily simple moving averages.
As apparent on the chart, the rate tumbled below the 55-day moving average. However, the rate could gain support of the 100- and 200-hour moving averages.
Daily chart
Read More: Technical Analysis
Traders short the USD/JPY
On Monday, 60% of open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
By the middle of Tuesday's London trading hours, the sentiment was 73% short.
Meanwhile, in the 100-pip range 61% of pending orders were to sell and 39% were to buy.