The USD/JPY has retested a lower trend line of an ascending pattern. However, all attention is expected to go away from technical analysis despite technical levels working.
That is due to the upcoming Federal Reserve and Bank of Japan monetary policy announcements set to occur at 18:00 GMT of Wednesday and during the Asian session on Thursday.
Central Banks incoming
On Wednesday, at 18:00 GMT the Federal Reserve is making its FOMC Statement, Federal Funds Rate and Economic Projections. Afterwards, at 18:30 GMT the FOMC Press Conference will take place.
On Thursday, the Bank of Japan will make a Monetary Policy Statement and host a Press Conference. However, the time has not been set. Bank of Japan does not set an exact time for their monetary policy events.
Click Here: Federal Reserve Preview
Click Here: Bank of Japan Preview
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair re-tested the lower boundary of the medium-term ascending channel at 108.20.During today's morning, the pair was testing the resistance cluster formed by the 55-, 100– and 200-hour SMAs, as well the weekly PP and the Fibo 38.20% in the 108.44/108.51 range.
If the given resistance does not hold, the exchange rate could extend gains and target the psychological level at 108.70.
Otherwise, it is expected, that the rate could re-test the given channel. It is unlikely, that a breakout south could occur due to the support of the weekly S1 at 108.23.
Hourly Chart
On the daily candle chart, a large descending channel pattern can be observed.
Also, as apparent on the chart, the rate is trading sideways around the Fibonacci 38.20% retracement at 108.43.
Daily chart
Read More: Technical Analysis
Traders are long on USD/JPY
Since Monday, 72% of open position volume on the Swiss Exchange Market were long.
Meanwhile, trader set up pending orders were mostly bearish, as 73% of pending commands in the 100-pip range were set to sell.