On Monday, the USD/JPY was recovering after the sharp 185 pip 1.68% decline that it experienced since Thursday.
In general, the surge was expected to be stopped by the resistance of the 38.20% Fibonacci retracement level at 108.44.
Bureau of Economic Analysis released the US Prelim GDP data, which came out in line with expectations of 3.1%.
According to the official release: "Today's estimate reflects downward revisions to non-residential fixed investment and private inventory investment and upward revisions to exports and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up; the general picture of economic growth remains the same."
This week will have various data releases that can impact the USD/JPY.
On Monday, the ISM Manufacturing PMI will be published at 14:00 GMT. The event has caused moves from 15 to 40 pips during 2019.
On Wednesday, a minor move might be caused by the ISM Non-Manufacturing PMI at 14:00 GMT.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
USD/JPY short-term daily review
On the previous trading session, the USD/JPY currency pair traded down and reached the Fibonacci 38.20% retracement at 108.44. During Monday's session, the pair reversed north from the lower boundary of the short-term descending channel at 108.10.From a theoretical perspective, it is expected, that the exchange rate could continue to extend gains. In this case, the rate has to surpass the given Fibonacci retracement.
If the given level holds, it is likely, that the pair could trade down along the lower channel line located circa 108.00.
It is unlikely, that the rate could drop lower than the 107.73 due to the support of the weekly S1.
Hourly Chart
On the daily candle chart it can be seen that the decline could reach down to the 107.70 level. At that level the first monthly support was located at.Daily chart
Since Friday, the sentiment was 70% long. Traders were mostly long, and they were suffering losses during the decline.
Traders had stuck to their positions despite new low levels being reached. They were recovering during Monday's trading.
Meanwhile, trader set up pending orders had become neutral, as 52% of pending commands in the 100-pip range were set to buy.