The main point of attention on the USD/JPY is not the forecast, but the recent massive moves.
Namely, the pair has jumped up to 111.20 and afterwards immediately declined down to support levels at 110.80.
The Federal Reserve released the US FOMC Meeting Minutes on Wednesday. The Fed officials provided in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year. Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet," the document said.
Only one US data release
As it is accustomed, the last week of the month is set to be quiet for fundamental macroeconomic data releases.
The macro week will start on Wednesday. At 13:30 GMT the Canadian CPI data will be published.
On Thursday the US Advance GDP will be released at 13:30 GMT. This event can cause moves of around 20 base points.
On Friday, the Canadian GDP data will be out at 13:30 GMT. It is most likely set to be the event which will cause the biggest move during this week.
For more information watch the weekly calendar analysis stream on our YouTube channel.
USD/JPY short term daily review
The USD/JPY has crashed the short and medium term patterns. Namely, it jumped suddenly on Monday when the pair broke the resistance of a medium scale descending pattern.The event resulted in a sharp move upwards to the resistance of the most dominant ascending pattern near the 111.20 level. Afterwards, the rate declined down to the 55 and 100-hour SMAs at 110.80.
In general, from a technical perspective a surge up to the 111.00 mark should occur. However, monitor all fundamental news associated with the pair closely. Another sharp move might be possible.
Hourly Chart
On the daily chart, the pair has resumed its surge. Namely, it has stopped the previous sideways consolidation.Moreover, note that the resistance of the dominant pattern of the hourly chart was located at the same spot as the 200-day simple moving average at 111.27. This levels is set to strengthen the technical resistance at 111.20.
Daily chart
On Monday, 60% of all the open position volume was in short positions. On Tuesday, 56% of traders were short.
It can be hypothesized that the 4% of short volume was stopped out during the sudden jump.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell the pair in 55% of cases.
Although, some got stopped out, the rest of the traders remain short.