New high levels have been reached by the USD/JPY the most recent surge was caused by the US Federal Reserve. Namely, a speech made by the head of the Federal Reserve Jerome Powell has caused an all-out surge of the USD.
At mid-day on Friday, the rate was testing the resistance of the 108.50 level.
Economic Calendar
On Wednesday, the US ADP Non-Farm Employment Change at 13:15 GMT will be on the headlines. However, the market does not care, as since December 2 the rate has moved only 3.9 to 13.3 pips on the release.
Next week, on Wednesday, the US Consumer Price Index data could cause a minor move on USD assets at 13:30 GMT. The USD/JPY has moved from 4.7 to 21.5 pips on the announcement.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term daily review
The USD/JPY extended its surge and did not retrace back to the 55-hour SMA. Instead, the currency exchange rate surged and by the middle of Friday's trading had reached the 108.50 mark. It occurred due to the speech of the head of the Federal Reserve Jerome Powell, which caused a major surge of the US Dollar against all other assets.In regards to the near term future, the rate was expected to test the psychological resistance of the 108.50 mark. If this level gets passed, the rate could aim at the 109.00 level. Note that on Friday the 109.00 mark was strengthened by the weekly R3 simple pivot point at the 109.02 level.
On the other hand, the rate is highly overbought, as it has left far below it the 55 and 100-hour simple moving averages, which were pushing the rate up. Due to that reason, the pair could trade sideways below the 108.50 level.
Hourly Chart
On the daily candle chart, the rate has pierced the upper trend line of the channel up pattern, which captures the 2021 surge. Namely, the recent gains are larger and achieved faster than it was previously expected.
Moreover, the recent fundamental move broke the resistance of the 50.00% Fibonacci retracement level at 108.35.
Daily chart
Since Wednesday, traders were 73% short on USD/JPY. The Swiss Foreign Exchange open positions have been mostly short since last Friday.
This Friday, the sentiment slightly changed, as 71% of volume was short. Traders had remained short despite the surge.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 62% to sell.
The orders were 73% to sell on Thursday.