Economic Calendar
On Wednesday, various exchange rates could react to the publication of the Markit Services and Manufacturing Purchasing Managers Indices. They are called indices, but in fact are survey results. Managers of a sector are surveyed about their expectations of the future in the sector.
In general a reading above 50 is seen as positive and a reading below 50 means bad expectations. However, the market does not care for the reading. What matters is the difference from the market consensus forecast. If the released reading is below or above expectations and there is a major difference, it shows that the market was wrong. Such data is followed by an adjustment in the underlying currency's value.
On Thursday, the US Advance GDP might impact the markets via an adjustment of the value of the US Dollar. Better GDP means that the US does not need to cut rates, which would keep the Dollar higher. Bad GDP data indicates that the Fed can cut, which would reduce the value of the USD.
On Friday, at 12:30 GMT, the top event of the week will take place. The US Core PCE Price Index will move the markets. The Core Personal Consumption Expenditure Index is expected to impact the markets by revealing whether inflation has increased or continues to decline. In general, the markets expect a reading of a monthly price increase of 0.2%. If the number is higher, the Dollar should surge. A reading below +0.2% is set to cause a decline of the USD.
USD/JPY hourly chart analysis
In regards to resistance, the 157.00 level was keeping the pair down on Monday. Higher above, note the combination of the 50 and 100-hour simple moving average and a recently marked resistance line near 157.20. If these levels fail, the 157.70/157.85 range and the 158.00 mark are expected to impact the pair.A potential resumption of the prior decline might be slowed down by the weekly S2 and S3 simple pivot points at 158.54 and 155.90. In addition, note the 156.50 and 156.00 levels.
Hourly Chart
USD/JPY daily chart's review
Prior analysis: "On the daily candle chart, the rate has found support in the prior high level range at 158.00 and the 50-day simple moving average.However, on Monday it appeared that the rate was moving below the range and the moving average. A potential broader decline could find support in the 156.00 level and the 100-day SMA."
Daily chart
Last week, traders had booked gains and were long, as 57% were in long positions and pending orders were 69% to buy.
This week, traders were still bullish as 56% of volume was long. Meanwhile, pending orders were 57% to buy.