On Wednesday, the USD/JPY continued to decline in the aftermath of the previously experienced high volatility.
Namely, after hitting the dominant resistance levels on Tuesday the USD/JPY was still declining on Wednesday.
The Federal Reserve released the US FOMC Meeting Minutes on Wednesday. The Fed officials provided in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year. Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet," the document said.
Only one US data release
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
The macro week will start on Wednesday. At 13:30 GMT the Canadian CPI data will be published.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
USD/JPY short term daily review
The US Dollar had extended its decline against the Japanese Yen on Wednesday.In general, the pair was heading for the support of the weekly S2 at the 110.23 level. That level should be reached during this trading session. If the S2 gets passed easily, the rate will head next to the weekly S3 at 110.00.
However, the simple moving averages would be left too far above the current rate, which would indicate that the rate is oversold.
Hourly Chart
On the daily chart the pair bounced off the resistance of the 200-day simple moving average. Most likely this resistance level will continue to hold near the 111.30 level.Moreover, it is set to soon be joined by the 100-day simple moving average.
Meanwhile, take into account that the 110.00 level's technical support levels will be strengthened by the 55-day SMA.
Daily chart
Trader open position volume on the Swiss Foreign Exchange remains short. 57% of open volume was short on Wednesday.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell the pair in 52% of cases.