During Thursday morning, the USD/JPY currency pair was testing the support level formed by the 200-hour SMA at 107.76.
If the given support holds, some upside potential could prevail in the market in the short term.
Institute for Supply Management released the US ISM Non-Manufacturing PMI data , which came out worse-than-expected of 55.1 compared with the forecast of 56.1.
According to the official release: "The NMI registered 55.1 percent, which is 1.8 percentage points lower than the May reading of 56.9 percent. This represents continued growth in the non-manufacturing sector, at a slower rate. This is the index's lowest reading since July 2017, when it registered 55.1 percent. According to the NMI, 16 non-manufacturing industries reported growth. Although the non-manufacturing sector's growth rate dipped in June, the sector continues to reflect strength. The comments from the respondents reflect mixed sentiment about business conditions and the overall economy. A degree of uncertainty exists due to trade and tariffs."
US Employment data set on focus
The week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the USD/JPY charts this event has caused moves in a range from 13.4 to 38.9 pips since February.
USD/JPY short-term daily review
During Wednesday, the USD/JPY currency pair tried to surpass the resistance level formed the monthly PP at 107.84. During today's morning, the pair was testing the given resistance.Note, that the exchange rate is supported by the 200-hour SMA, currently located at 107.50. Thus, bulls could prevail in the market in the short term. In this case, the rate would have to surpass the 55– and 100-hour SMAs, located at 107.89 and 108.01 respectively.
However, if the given resistance hold, the pair could trade sideways between it, as well the support level formed by the weekly PP at 107.63.
Hourly Chart
On the daily candle chart, the rate reversed south from the upper boundary of the medium-term descending channel at 108.20.
From a theoretical point of view, it is likely, that the rate could maintain its decline in the nearest future.
Daily chart
By the middle of Monday's trading session, on the Swiss Foreign Exchange 72% of trader open USD/JPY position volume was in long positions.
On Thursday, 75% of volume was in short positions.
Meanwhile, trader set up pending orders were almost neutral, as 48% of pending commands in the 100-pip range were set to sell and 52% were set to buy.