On Monday morning, the USD/JPY reached the 109.40 level. The pair traded at this level shortly, as it tested the resistance of three technical levels from 109.24 to 109.40.
By the middle of the day's GMT trading hours, the pair had bounced off the resistance levels and was declining.
Economic CalendarAs it occurred during the last week, due to the fundamental changes in the markets, Dukascopy Analytics suggest to note the scheduled macroeconomic events, but avoid using historical data for guidance.
Namely, the whole world changes the money supply by announcing monetary stimulus and government expense increases. In other words, the central banks are creating more money and giving it to governments to stop the effects of the coronavirus. In effect, each announcement causes a fall of the currency that it affects.
However, click on the link and take a look at the last reactions to various events in March. Even already ignored events like Producers Price Index and Consumer Price Index caused notable reactions above 20 pips. Previously, the release of these data sets did not cause an increase of exchange rate volatility.
USD/JPY short-term daily review
On Friday, the USD/JPY currency pair traded upwards. During today's morning, the pair raised to the resistance formed by the Fibo 23.60% and the weekly R1 in the 109.30 area.If the given resistance holds, it is likely that a reversal south could occur in the nearest future. In this case it is unlikely that the exchange rate could drop lower than the support formed by the 55– and 100-hour SMAs, as well the Fibo 38.20% and the weekly PP in the 108.00 area.
If the given resistance does not hold, it is likely that some upside potential could continue to prevail in the market. Note that the currency pair would have to exceed the weekly R2 located at 109.89.
Hourly Chart
On the daily candle chart, on Monday, the rate broke the technical resistance of the 55 and 100-day simple moving averages near 109.00.
These two SMAs together with the 200-day SMA were set to provide support.
Daily chart
Read More: Technical Analysis
Traders are short on USD/JPY
On Monday, 62% of trader open position volume on the Swiss Foreign Exchange was in short positions.
During the previous week, traders were also short with more than 60% of open position volume being bearish.