The USD/JPY dropped, as the US monthly employment data was released on Friday. The drop was eventually stopped and reversed by the support of the 109.60 level.
By the middle of Monday's European trading hours, the rate had recovered to a cluster of technical levels that surrounded the 109.90 level. The cluster consisted of the 55, 100 and 200-hour simple moving averages and the weekly simple pivot point in the range from 109.89 to 109.96.
Economic Calendar
On Friday, the rate could move due to the publication of the US Producers Price Index at 12:30 GMT.
USD/JPY short-term review
In the case that the rate passes the resistance of the cluster of technical levels near 109.90, the pair could aim at the resistance zone near 110.25 and afterwards the 110.40 level.Meanwhile, a bounce off from the 109.90 level's resistance would most likely result in the pair looking for support in the 109.60 level. Below the 109.60, the 109.50 level and the weekly S1 simple pivot point at 109.40 could provide support.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, the pair has broken the resistance of the channel down pattern, which has guided the rate down since the start of July. Moreover, the pair pierced the resistance of the 55-day simple moving average, which has been providing resistance to the pair since August 18.Daily chart
On Friday, traders on the Swiss Foreign Exchange were 65% short on USD/JPY.
On Monday, the sentiment was 67% short.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 51% to sell.