After finding support in the 55-hour SMA, the USD/JPY was making another attempt to pass the resistance of the 112.00 level.
In general, it was expected that the 112.00 level will give in and the rate will continue to surge by reaching the monthly R1 at 112.35.
The Federal Reserve released the US FOMC Meeting Minutes last 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.
US data on Friday might impact USD/JPY
This week is set to be the first one of the month. Due to that reason it is set to have important data releases occurring.
The notable data releases that Dukascopy Analytics will cover will start on Wednesday. At 13:30 GMT the Canadian Trade Balance will be published and cause a notable move on all CAD pairs.
Moreover, at 15:00 GMT the Bank of Canada will publish their Overnight Rate, which has on average caused moves around 80 base points on the USD/CAD.
On Thursday, all attention will be on the European Central Bank. The bank will publish its Main Refinancing Rate at 12:45 GMT and host a press conference at 13:30 GMT.
The rate announcement has become insignificant, as the ECB keeps their rate at 0.00%. Instead during the press conference the heads of the bank will reveal information about the ECB's asset buying program.
On Friday, Canada and the US will publish their monthly employment data sets. It has five important data sets impacting the USD/CAD. It is the most complicated one to work with, as each data set impacts the rate differently.
For more information watch the weekly calendar analysis stream on our YouTube channel.
USD/JPY short term daily review
The short term forecast for the USD/JPY is concentrating on the 55-hour simple moving average and the 112.00 level.Namely, the 55-hour SMA is pushing the pair into passing the resistance of the 112.00 level. If this level gets broken, the rate would surge to the monthly R1 at 112.35.
On the other hand the SMA might fail to provide the needed support to push the USD/JPY higher. In that case the pair might pass below it and decline as low as the 111.50 mark. At that level three technical support levels were located at.
Hourly Chart
On the daily chart the previous resistance line of an ascending pattern was providing support. The rate had no additional technical resistance provided by the daily chart.Namely, all of the daily simple moving averages were located below the currency exchange rate.
Daily chart
Trader open short position volume on the Swiss Foreign Exchange has increased. The short position proportion has increased from 64% to 66%. On Friday, 61% of positions were short.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell. Namely, 55% of orders were short.
In general, traders expect the rate to fail at passing the 112.00 level.