In the US it is the case of whether the Dollar continues its decline or it gets oversold and a retracement recovery occurs. Meanwhile, in Japan the Prime Minister is changing the government. Media reports indicate that the change of the Ministers would allow the Bank of Japan to end its ultra-easy monetary policy and strengthen the Yen. A Reuters poll indicates that 20% of surveyed economists expect the BoJ to end its policy already in January.
Economic Calendar
During the week before Christmas, there will be a couple of data releases that could impact the financial markets.
On Thursday, not the publication of the US Final GDP at 13:30 GMT. This is the final of the three quarterly US GDP releases. The United States release quarterly Gross Domestic Data over a span of a quarter. Data is published in three releases – Advance, Preliminary and Final. The most impact comes from the Advance GDP, and the least is from the upcoming Final GDP.
On Friday, the United States Bureau of Economic Analysis will publish the Core Personal Consumption Expenditure Price Index at 13:30 GMT. The change of the index shows how inflation impacts consumers. It is different from the CPI with the fact that it measures only goods that are consumed by individuals.
USD/JPY hourly chart analysis
From a technical perspective the rate has the support of the 141.00 level. Although there is no additional support as low as the weekly S2 simple pivot point at 138.79. In the meantime, it is highly likely that the 140.00 mark will act just like the 150.00 and impact the pair.On the other hand, a recovery of the US Dollar against the Yen is set to face the 142.50 level and the 50-hour simple moving average. A move above these levels could be slowed down by 143.00, 143.50 and the combination of the 144.00 level and the 100-hour simple moving average. Higher above, the 144.30/145.10 range is set to turn into resistance, as it has during the week acted as both support and resistance. In addition, it is strengthened by the weekly simple pivot point and the 200-hour simple moving average.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, the USD/JPY passed below the support of the 200-day simple moving average. Meanwhile, the recent fundamental recovery has ignored the 144.60/145.95 support and resistance range.In general, fundamentals from the Bank of Japan and the Federal Reserve are impacting the broader picture of the financial instrument.
Regarding the future, if the 140.00 mark does not act as support, note the broad support and resistance range at 137.30/139.40.
Daily chart
Before the Fed announcement, traders were 54% short, but pending orders in the 100-pip range around the current rate were 55% to sell.
After the Fed, traders were 58% short and orders were 52% to buy.
It appears that the sell orders were executed and additional USD/JPY bears were riding the decline.
On Friday, traders were 61% short and orders were 61% to sell. The bearish sentiment had increased.