The USD/JPY listens to fundamental announcements. It has been influenced by both US Federal Reserve information and the situation in Kashmir between Pakistan and India.
Due to those reason the volatility of the pair has been massively high.
The Federal Reserve released the US FOMC Meeting Minutes last Wednesday. The Fed officials provided in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year. Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet," the document said.
Only one US data release
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
USD/JPY short term daily review
The USD/JPY has revealed a wide descending channel. The event has taken place during the recent sharp waves of volatility caused by fundamental events.From one side we have the USD surging due to the announcement that the FED will continue to decrease the USD supply throughout this year. On the other hand, the JPY was gaining value as a safe haven currency as soon as the Pakistani and Indian governments started shooting down each other's planes.
Meanwhile, a technical cluster of support levels at 110.80 was providing the needed strength for a surge, which could reach 111.00 by the end of the day's trading.
Hourly Chart
On the daily chart the pair bounced off the resistance of the 200-day simple moving average. Most likely this resistance level will continue to hold near the 111.30 level.Moreover, it is set to soon be joined by the 100-day simple moving average.
Meanwhile, take into account that the 110.00 level's technical support levels will be strengthened by the 55-day SMA.
Daily chart
Trader open position volume on the Swiss Foreign Exchange remains short. 61% of open volume was short on Thursday.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were neutral. Most likely the open position proportion will not change.