In general, the rate was expected to consolidate by either trading sideways or declining down to the support of the 107.20 level.
Economic Calendar
This week there are couple of events that could move the USD/JPY pair.
On Wednesday, September 11, the US Producer Price Index data will be released at 12:30 GMT. Since February, the USD/JPY rate has been moved from 3.9 to 31.9 pips by the event.
On Thursday, September 12, the US Consumer Price Index will be published at 12:30 GMT. Last time, this data release caused a 23-pip move.
The week will end with the US Retail Sales data release at 12:30 GMT on Friday, September 13.
USD/JPY short-term daily review
As the rate has surged sharply and reached the resistance of the 107.50 level and a weekly pivot point at 107.52, it is expected to consolidate. A consolidation of gains could occur by trading sideways or retracing back down.If the rate trades sideways, it would occur most likely by making continuous attempts to pass the resistance levels at 107.50.
On the other hand, a short lived decline could occur. In that scenario the rate would reach down to the support of the 107.20 level, which has proven its strength during the last week.
Hourly Chart
On the daily candle chart, the pair has passed the resistance of the 55-day simple moving average, which is located at the 107.20 level. This level is the technical reason for the rate bouncing off or finding support at the 107.20 mark.
Daily chart
Read More: Technical Analysis
Traders remain long on USD/JPY
On Monday, 61% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
On Tuesday, the sentiment had slightly decreased, as 59% of volume was bullish.
Meanwhile, trader set up orders were set to sell. Namely, in the 100-pip range 66% of pending orders were set to sell and 34% were to buy.
Previously, the orders were neutral.