The decline of the USD/JPY is being stopped by the psychological support of the 109.20 level.
Namely, someone with enough capital to move the rate starts buying at that level.
Meanwhile, from a technical perspective the 55 and 100-hour simple moving averages should push the rate down.
The Federal Reserve released the FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
The US policymakers showed that they were in no rush to change interest rates, despite the fact that the US economy remains to strengthen. Members of the Federal Open Market Committee voted on leaving the rates unchanged, as they continue to use "wait-and-see" approach.
On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
USD/JPY short-term daily review
During the previous trading session, the USD/JPY currency pair tried to surpass the resistance level formed by the Fibonacci 50.00% retracement at 109.58. During Wednesday's morning, the pair was trading near the support level—the monthly S3 at 109.12.From the one hand, it is likely, that the exchange rate could trade sideways between the given support and resistance in the nearest future.
However, note, that the rate is pressured by the 55– and 100-hour SMAs, located circa 109.50. Thus, if the given support does not hold, it is expected, that the pair could reach the 109.00 level.
Hourly Chart
On the daily candle chart the rate has reached previous low levels.Meanwhile, note that the recent surge up to the 100-day simple moving average that was followed by a decline reduced the pressure of the rate being oversold.
Daily chart
On Tuesday, 59% of open position volume was in longs.
By the middle of Wednesday's London trading session the Swiss Foreign Exchange sentiment had changed. 64% of total open position volume was in long positions.
Due to the rate not continuing its decline some have opened long positions and closed short positions.
Meanwhile, trader set up pending orders were neutral, as 50% of pending commands in the 100-pip range were set to sell and the same amount was set to buy.