The surge of the USD/JPY has continued. By the middle of Tuesday's trading the rate had reached above the 108.80 level. Moreover, the rate had no resistance as high as the 109.00 level.
Future forecasts were based upon what would happen at the 109.00 mark.
On Tuesday, the US ISM Non-Manufacturing PMI is set to be released at 15:00 GMT. This event has caused moves from 8.0 to 56.6 pips since October 2018.
Meanwhile, take into account that the next week's reaction tables have been published. Take a look at the 04.11-08.11 Event Historical Reactions publication.
USD/JPY short-term daily review
Yesterday, the US Dollar appreciated against the US Dollar. During Tuesday morning, the USD/JPY currency pair reached the psychological level at 108.80.Given that the exchange rate is supported by the 55-, 100- and 200-hour moving averages, it is likely that some upside potential could prevail in the market. However, note that the rate would have to surpass the resistance level formed by the weekly R1 at 109.04.
If the given resistance level holds, it is likely that the currency pair could trade sideways around the 108.80 level in the short term. Also, it is unlikely that some downside potential could prevail in the market, and the pair could decline lower than the monthly PP at 107.94.
Hourly Chart
On the daily candle chart, the rate has bounced off a lower trend line of a channel up pattern. Previously, the rate had pierced the trend line and it was speculated that the long term surge could be over.
By the middle of Tuesday's London trading, it was observed that the rate was set to face additional resistance from the 200-day SMA at the 109.00 level. The SMA kept the rate down throughout October.
Daily chart
Since Friday, on the Swiss Foreign Exchange USD/JPY open position volume was almost neutral. 52% of open volume was long and 48% was short.
On Tuesday, the sentiment was still neutral. However, 53% of volume was short and 47% was long.
Meanwhile, trader set up orders were majorly bearish. Namely, in the 100-pip range 79% of pending orders were to sell and 21% were to buy.
The orders were 61% to sell on Monday.
In general, it could be observed that traders are expecting a reversal that would be followed by a decline.