On Wednesday morning, the USD/JPY continued the decline that was started on Tuesday. By the middle of the day's European trading hours, the currency exchange rate had reached the technical support of the 55-hour simple moving average.
In regards to the near term future, the pair's direction depends on whether the 55-hour SMA manages to push the rate up.
Economic Calendar
On Wednesday, at 12:30 GMT the usual US weekly Unemployment Claims are set to grab the attention of the financial media despite the event not moving the markets. At the same time, the US Preliminary GDP is set to be published. This event also, despite being on the headlines, has not caused notable market moves.
At 19:00 GMT, the US FOMC Meeting Minutes are scheduled to be published. Do not expect an immediate reaction of the markets, as the Meeting Minutes is not a statistics number, but a pdf document that contains clues on the future of the US monetary policy.
Its impact is gradual, as various market participants make their trades based upon how they interpret the information in the document. Quite often, the same text or even word is interpreted differently by various market participants. What matters is whether bullish or bearish views dominate after the publication.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term daily review
In the case of the 55-hour SMA managing to provide enough support for the USD/JPY to surge, the rate would test the resistance of the 104.60 level. Afterwards, the 104.75 could provide resistance, as it did on Tuesday.On the other hand, if the SMA fails to provide support, the rate would immediately encounter additional support at 104.23. At that level the 200-hour SMA and the weekly simple pivot point were located at.
Hourly Chart
On the daily candle chart, one can observe that the rate paused its recovery after regaining back half of the losses suffered since November 12.
In the meantime, take into account that the resistance of the 105.00 level is strengthened by the 55-day simple moving average. However, this SMA did not properly hold in late August, early October and early November. It was pierced for a couple of trading sessions during these time periods.
Daily chart
Since Tuesday, on the Swiss Foreign Exchange 65% of volume has been in long positions.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 52% to buy the pair.