At mid-day on Thursday, a fundamental jump occurred on the USD/JPY charts. During the sudden surge, the rate passed the resistance of the 55 and 100-hour simple moving averages and a 38.20% Fibonacci retracement level from 107.60 to 107.90.
On Friday, these levels provided support, and the pair continued its surge.
Economic CalendarAs it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
USD/JPY short-term daily review
The rate could face the resistance formed by the weekly PP, the Fibo 23.60% and the 200-hour SMA in the 108.90/109.35 area.If the given resistance cluster holds, it is likely that the US Dollar could consolidate against the Japanese Yen in the nearest future.
It is unlikely that bears could prevail, and the pair could drop below the support area formed by the weekly PP, the monthly S1 and the Fibo 50.00% in the 106.60/106.85 range.
Hourly Chart
On the daily candle chart, the rate has broken the resistance of the 200-day simple moving average at 108.30.
Meanwhile, the currency exchange rate still faced the 55 and 100-day SMAs near 109.00.
Daily chart
Read More: Technical Analysis
Traders remain short on USD/JPY
Traders had been short throughout the week. On Friday, 64% of trader open position volume on the Swiss Foreign Exchange was in short positions.
Previously, on Wednesday the sentiment was 64% short, and on Thursday it was 63% short.