The simple moving average caused a decline, which by the middle of Tuesday's trading session was back down at the 105.10 level. In general, the rate was still expected to reach the 105.00 level.
US CPI and Retail Sales in focus
During this week there are a couple of government macroeconomic data releases, which might cause sudden moves.
On Tuesday, the US Consumer Price Index is set to be published at 12:30 GMT. The data release has two numbers being published that are important. Namely, the CPI and Core CPI.
The CPI differs from the Core CPI by not having included food and energy prices. That is done to see the inflation of goods that are not a basic nesecity.
This event has caused USD/JPY adjustments since March ranging from 11.5 to 28.4 pips.
On Thursday, the US Retail Sales are expected to cause a move at 12:30 GMT. Note that this release also will consist of two numbers.
The Core Retail Sales do not include auto sales. People buy cars on debt, paying the same amount of money each month and continue to buy the needed transportation no matter what. The elimination of auto sales improves retail sales as a measure of economic growth.
The data release since April has caused moves from 12.2 to 23.7 base points.
USD/JPY short-term daily review
During the previous trading session, the USD/JPY currency pair traded sideways around the psychological level at 105.40. During Tuesday's morning, the pair declined at the 105.20 mark.Note, that the exchange rate is pressured by the 55-hour moving average, currently located at 105.49. Thus, it is expected, that bears could prevail in the market in the nearest future. In this case, the rate could be supported by the weekly S1 at the 104.96 mark.
Otherwise, it is likely, that the pair could maintain its consolidation in the 105.20/105.60 range in the short term. It is unlikely, that the rate could exceed the 105.75 mark due to the resistance of the 100-hour SMA.
Hourly Chart
On the daily candle chart, the run to safety has caused a piercing of the lower trend line of a dominant pattern.
As soon as the move ends, the chart will be reviewed, as in the aftermath of the fundamental move a new trend should reveal itself.
Daily chart
Read More: Technical Analysis
Traders remain long
On Tuesday, 74% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up pending orders were bullish, as in the 100-pip range 74% of pending orders were set to buy and 26% were to sell.
Traders clearly expect a surge of the USD/JPY.