The target of the 110.50 has been reached. The USD/JPY had reached far above the 110.50 mark before stopping and consolidating its gains.
In general, the surge could continue as high as the 110.80 level, if it resumes. On the other hand the pair might retrace back down to the support levels near the 110.15 level.
The Bureau of Labor Statistics released Non-Farm Employment Change data better-than-expected of 304K compared to forecast 165K. Note, that the Average Hourly Earnings and the Unemployment Rate were released at the same time with the Non-Farm Employment Change.
The U.S. Bureau of Labor Statistics reported on Friday: "The labor force participation rate, at 63.2 percent, and the employment-population ratio, at 60.7 percent, changed little over the month; both measures were up by 0.5 percentage point over the year."
US data releases will affect the USD/JPY
This week will be busy for macroeconomic data releases. With the exception of Tuesday, on each day there is a notable data release.However, take into account that on Tuesday the heads of Bank of England and the US Federal Reserve will speak publicly. UK's Governor Carney will speak at 13:00 GMT and the head of the Federal Reserve Jerome Powell is set to speak at 17:45 GMT.
On Wednesday, at 09:30 GMT the UK CPI will be released. Later on at 13:30 GMT the US CPI and Core CPI will be released.
On Thursday, at 13:30 GMT the US Retail Sales and Core Retail Sales data will be published. In addition, at the same time the US Producers Price Index will be released.
The week will be closed by a UK data release. Namely, the UK Retail Sales data will be published at 09:30 GMT.
All of these events are scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The streams start ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
USD/JPY short term daily review
The currency exchange rate broke the resistance levels of the weekly R1 at 110.13 and the weekly R2 at 110.51 to trade at the 110.40 level.In regards to the near-term future, most likely, the 61.80% Fibonacci retracement level at 110.77 will resist the rate to let it trade sideways at the 110.40 level for the rest of the day.
On the other hand, the USD/JPY could break the resistance of the 61.80% Fibo to trade sideways near the upper boundary of the dominant pattern line at 110.80.
Hourly Chart
On the daily chart the USD/JPY has finally reached the simple moving averages.On Tuesday the pair touched the 55-day simple moving average, which was located at the time at 110.60.
Meanwhile, note that the 100-day SMA was located far above the rate at 111.70, and the 200-day SMA was at 111.24.
Daily chart
On Tuesday, USD/JPY traders on the Swiss Foreign Exchange were no longer long on the pair. The sentiment had become 51% short.
Meanwhile, trader set up pending orders - stop losses, take profits and position open orders in the 100-pip range were almost neutral. 53% of orders were set to sell in that range.
It seems that traders have taken profit at the 110.50 mark, and their opinion on the future has become divided.