The USD/JPY managed to find support on Thursday to surge higher. The rate had reached the resistance of the 111.75 level on Friday morning before it began trading sideways.
The rate is expected to consolidate its gains before continuing higher. Moreover, at the moment it is facing the combined resistance of a large scale ascending pattern and a weekly pivot point.
Meanwhile, the support of the 55 and 100-hour simple moving averages was approaching the pair from below.
On Monday, the US Census Bureau released the US Retail Sales data, which came lower-than-expected of -0.2% compared with forecast 0.3%.
According to experts, the US retail sales surprisingly declined in February due to slumps in grocery stores and building materials. The weather played an important role in February sales. There was record rainfall in the Southeast, winter storms in the North, record snowfall and cold temperatures in the Northwest. Also, this decline may indicate future slowdown for the US economy in the first quarter.
US employment data on Friday
On Friday, at 12:30 GMT the US and Canadian employment data sets will be published. The US data is expected to impact all USD pairs.Meanwhile, the Canadian data should cause a much bigger impact on all CAD pairs. Most complicated price movements will happen on the USD/CAD.
USD/JPY short term daily review
The hourly chart shows that the surge of the pair was stopped by the combination of a dominant pattern's resistance line and the weekly pivot point at 111.75. Due to this resistance the rate is trading sideways.The sideways trading is expected to continue until the end of the day. There are a few arguments for this scenario – the rate consolidates after a surge, the pair has resistance close by and there are no close by technical support levels.
On the other hand, a drop could occur down to the support of the 55-hour SMA at 111.50.
Hourly Chart
On the daily chart it can be observed that the rate has broken the resistance of the 200-day SMA. The simple moving average was now expected to provide support to the currency rate at 111.50.Daily chart
The total open position short volume on the Swiss Foreign Exchange has increased from 62% on Thursday to 68% on Friday.
The traders, which were short previously were still short. Moreover, they have been joined by other, which see the rate as overbought and expect a retracement downwards.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were neutral. 51% of orders were set to buy.