During Friday's morning, the USD/JPY currency pair jumped to the psychological level at 108.00.
It is likely, that the pair could re-test the upper boundary of the medium-term descending channel.
Institute for Supply Management released the US ISM Non-Manufacturing PMI data , which came out worse-than-expected of 55.1 compared with the forecast of 56.1.
According to the official release: "The NMI registered 55.1 percent, which is 1.8 percentage points lower than the May reading of 56.9 percent. This represents continued growth in the non-manufacturing sector, at a slower rate. This is the index's lowest reading since July 2017, when it registered 55.1 percent. According to the NMI, 16 non-manufacturing industries reported growth. Although the non-manufacturing sector's growth rate dipped in June, the sector continues to reflect strength. The comments from the respondents reflect mixed sentiment about business conditions and the overall economy. A degree of uncertainty exists due to trade and tariffs."
US Employment data set on focus
The week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the USD/JPY charts this event has caused moves in a range from 13.4 to 38.9 pips since February.
USD/JPY short-term daily review
On Thursday, the USD/JPY currency pair traded sideways at the psychological level at 107.80. During Friday's morning, the pair jumped to the 108.00 mark.It is likely, that the exchange rate could maintain its growth in the short run due to the support cluster formed by the 55-, 100– and 200-hour SMAs, as well the monthly PP in the 107.80/107.98 range. In this case, the rate could reach the upper boundary of the medium-term descending channel located circa 108.30.
On the other hand, the pair could reverse south in the nearest future. If the given support cluster does not hold, the pair could tumble to the weekly PP located at 107.63.
Hourly Chart
On the daily candle chart, the rate is testing the upper boundary of the medium-term descending trend at 108.00.
From a theoretical point of view, reversal south could occur in the short term. However, if the given channel does not hold, the rate could reach the Fibonacci 38.20% retracement at 108.43.
Daily chart
By the middle of Monday's trading session, on the Swiss Foreign Exchange 72% of trader open USD/JPY position volume was in long positions.
On Friday, 74% of volume was in short positions.
Meanwhile, trader set up pending orders were bullish, as 54% of pending commands in the 100-pip range were set to buy.