After trading sideways throughout the start of this week, the USD/JPY was being pushed higher on Wednesday by the 55-hour simple moving average.
The surge was expected to eventually reach 111.75, as at that level the closest technical resistance was located at.
On Monday, the US Census Bureau released the US Retail Sales data, which came lower-than-expected of -0.2% compared with forecast 0.3%.
According to experts, the US retail sales surprisingly declined in February due to slumps in grocery stores and building materials. The weather played an important role in February sales. There was record rainfall in the Southeast, winter storms in the North, record snowfall and cold temperatures in the Northwest. Also, this decline may indicate future slowdown for the US economy in the first quarter.
US employment data on Friday
Until Friday there are no notable macroeconomic data releases scheduled to take place.On Friday, at 12:30 GMT the US and Canadian employment data sets will be published. The US data is expected to impact all USD pairs.
Meanwhile, the Canadian data should cause a much bigger impact on all CAD pairs. Most complicated price movements will happen on the USD/CAD.
USD/JPY short term daily review
During yesterday's trading session, the USD/JPY currency rate tried to surpass the support level—the weekly R1 at 111.32.As apparent on the chart, the rate has been trading in the ascending channel since the end of March. Thus, it is expected that currency pair targets the upper channel line located circa 112.00. However, the pair has to surpass the resistance level formed by the weekly R1 at 111.76.
From a theoretical point of view, it is unlikely, that the pair would go downside, as it is being supported by the 55-hour SMA at 111.29.
Hourly Chart
On the daily chart it can be observed that the rate is being kept down by the 200-day simple moving average.On Tuesday this technical resistance was holding. However, on Wednesday it had been pierced, as the currency exchange rate had reached above the 111.50 level.
Due to that reason at the moment most attention should be given on the daily chart.
Daily chart
Traders are shorting the USD/JPY, as 61% of the total open position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were neutral. 51% of orders were set to buy.