The testing of the 110.50 level's resistance was short, as during one hour it was passed.
On Wednesday morning, the USD/JPY had almost reached the 111.00 level before retracing back down. In the meantime, note that the 110.40 and 110.20 levels had provided resistance and support.
Economic Calendar
On Wednesday, at 13:15 GMT, the US ADP Non-Farm Employment Change is set to be released. This event has caused USD/JPY moves from 3.9 to 13.3 pips since November.
On the same day, at 15:00 GMT the US ISM Manufacturing PMI is set to be scheduled. The rate has moved from 5.0 to 14.4 pips on the announcement.
The week will end on Friday with the top event, as the US Employment data is set to be released at 13:30 GMT. The event will consist of three data sets being released. Combined they have caused moves from 19.7 to 34.0 pips on the charts.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term daily review
In regards to the near term future, the pair's retracement down was expected to look for support. Support could be found in the mentioned 110.40 and 110.20 levels. In addition, the 110.20 mark could be strengthened by the weekly R1 simple pivot point and the 55-hour simple moving average.If the mentioned support levels hold, the rate would recover and most likely make another attempt to pass the resistance of the 111.00 mark.
On the other hand, a passing of the support levels could result in a decline to the support of the 61.80% Fibonacci retracement level at 109.83 and the 100-hour simple moving average.
Hourly Chart
On the daily candle chart, the rate has broken the resistance of the channel up pattern, which guided its surge since December 21. It can be observed that the upper trend line of the pattern have in on the rate's third attempt to pass it.
Next notable resistance cluster on the daily candle chart is the zone that surrounds the 112.00 mark. The zone consists of the 2019 and 2020 high levels. Zoom out to see how the rate acted near this level during both of those years.
Daily chart
On Wednesday, traders were 71% short on USD/JPY. On Tuesday, the sentiment was 74% short.
The Swiss Foreign Exchange open positions have been mostly short for a month. It appears that traders expect a larger retracement back down, despite the rate gaining new heights.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 54% to buy.
Previously, 65% of orders were to sell.