It is unlikely that the pair could drop lower than the 106.00 mark due to the support of the 55-, 100- and 200-hour SMAs.
Economic Calendar
This week there are a couple of US data releases on the economic calendars that are shown as high impact.
Today, the US ADP Non-Farm Employment Change will be published at 12:15 GMT. Although, note that this is one of the releases that should not have a high impact mark and be discussed by financial media, as it has lost its power to impact the financial markets.
Due to that reason, since October 2018 our analysts ignored this data release. Recently, due to the possibility that it might have regained its strength, data was checked.
During this summer, five minutes after the data release there were moves from 5.2 to 15.2 pips on USD/JPY chart.
On Friday, US employment data will be published. The event will have three numbers being revealed – the Average Hourly Earnings, Non-Farm Employment Change and Unemployment Rate.
Due to each of the numbers impacting the rate differently by pushing the value of the USD up or down and with a different strength, the event has a wide range. Namely, since April the USD/JPY has moved from 13.4 to 38.9 pips due to the US labour data.
USD/JPY short-term daily review
On Wednesday, the USD/JPY currency pair skyrocketed to the monthly PP at 106.70. During today's morning, the pair reversed south from the given resistance level.On the one hand, the exchange rate could continue to go downwards within the following trading session. However, note, that the rate could gain support of the 55-, 100- and 200-hour SMAs in the 106.09/106.23 range.
If the given moving averages do not hold, the pair could decline to the weekly PP at the 105.82 mark.
On the other hand, the Greenback could trade sideways against the Japanese Yen, trying to surpass the given resistance.
Hourly Chart
On the daily candle chart, the pair trades below the daily simple moving averages. It is an indicator of the rate being oversold.
Meanwhile, note that the rate has been trying to surpass the resistance level formed by the Fibonacci 23.60% retracement at 106.98 since the beginning of August. If the given resistance holds, some downside potential could prevail in the market.
Daily chart
Read More: Technical Analysis
Volume of long positions decreased
On Thursday, 64% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were neutral. Namely, in the 100-pip range 68% of pending orders were set to sell and 32% were to buy.