The USD/JPY is surging in a recently revealed ascending channel pattern. The pair's next target is the 200-hour simple moving average at 108.72.
The short term forecasts of the pair are based on this level.
Institute for Supply Management released the US ISM Non-Manufacturing PMI data, which came out better-than-expected of 56.9 compared with forecast of 55.6.
According to the official release: "he NMI registered 56.9 percent, which is 1.4 percentage points higher than the April reading of 55.5 percent. This represents continued growth in the non-manufacturing sector, at a slightly faster rate."
US employment on Friday will impact USD/JPY
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.
USD/JPY short-term daily review
The USD/JPY is heading for the resistance of the 200-hour simple moving average.If the simple moving average's resistance gets broken, the rate could surge to the monthly pivot point at 108.83.
On the other hand, the SMA might force the rate into another test of the support of the 38.20% Fibonacci retracement level at 108.44.
In addition, note the added channel up pattern, which is likely going to be playing a role next week.
Hourly Chart
On the daily candle chart, a large descending channel pattern can be observed. The just added ascending pattern on the daily chart is junior to the descending pattern.In general, the surge is bound to reach the resistance of the monthly PP at 108.83.
Daily chart
Since Tuesday, the Swiss Foreign Exchange sentiment was 73% long. Namely, 73% of open USD/JPY position volume was in long positions.
Meanwhile, trader set up pending orders were neutral as 51% of pending commands in the 100-pip range were set to buy. Previously, the orders were 55% long.
In general, despite previously the USD/JPY touching low levels, traders have remained long, and they were profiting from this decision.