The decline of USD/JPY has reached the 109.30 level. Although, after touching it, the rate retraced back up to the resistance of the 109.60 level.
In general, the rate was expected to be pushed down by the resistance of the 55-hour simple moving average, which was approaching the rate.
The Federal Reserve released the FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
The US policymakers showed that they were in no rush to change interest rates, despite the fact that the US economy remains to strengthen. Members of the Federal Open Market Committee voted on leaving the rates unchanged, as they continue to use "wait-and-see" approach.
No important data for USD/JPY this week
On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
USD/JPY short-term daily review
During Friday, the USD/JPY currency pair surpassed the support level formed by the Fibonacci 50.00% retracement at 109.58.Given that the pair is pressured by the 55-hour moving average, currently located at 109.65, it is expected, that bears could continue to prevail in the market. A possible downside target is the psychological level at 109.20.
On the other hand, the exchange rate could trade sideways, trying to surpass the given resistance. It is unlikely, that the rate could step higher due to the resistance level formed by the 100– and 200-hour SMAs, as well the monthly S2 at 109.97.
Hourly Chart
On the daily candle chart it can be seen that the 100-day simple moving average, which was touched, indicated that the rate is no longer oversold.Due to that reason, the upwards pressure was removed. It was one of the causes of the massive selling that occurred.
Daily chart
On Friday, 59% of all open position volume was in long positions.
By the middle of Monday's London trading on the Swiss Foreign Exchange 56% of open position volume was in long positions.
Meanwhile, trader set up pending orders were bearish, as 57% of pending commands in the 100-pip range were set to sell.