USD/JPY dropped, as described before. The support of the 110.00 level was reached on early Wednesday morning.
During the day the rate was consolidating by trading sideways between the 110.00 and 110.20 levels.
Bureau of Labor Statistics released the US Non-Farm Employment Change, which came out better-than-expected of 263K compared with forecast 181K. Note, that the US Average Hourly Earnings and Unemployment Rate were released at the same time.
According to the official release: "Notable job gains occurred in professional and business services, construction, health care, and social assistance."
US data starts on Thursday
This week all the action on the US Dollar from a fundamental side will be in the second half of the week. Meanwhile, there are large events to watch prior to that.On Thursday, the usual data starts. At 12:30 GMT the Canadian Trade Balance and the US Producers Price Index will be released. These events can cause a move from five to eighty pips. The range is explained in the weekly Economic Calendar Overview video.
On Friday, there will be two times to watch the calendar.
At 08:30 GMT the UK GDP and Manufacturing Production will be published. This event can cause a move of fifteen to twenty pips.
At 12:30 GMT the Canadian Employment data will cause a move of about forty pips. At the same time the US Consumer Price Index release should cause a move of up to twenty pips. Combined they can have various impacts on the Forex market.
Watch this week's economic calendar analysis and leave comments with questions about the specifics.
USD/JPY short-term daily review
The USD/JPY has reached the 110.00 level. On Wednesday the support of the 110.00 level and the weekly S3 were keeping the rate from falling. In general, there were two short term scenarios most probable for the pair.The rate could trade sideways between the 110.00 level and the resistance of the 110.20 level until the resistance provided by the 55-hour simple moving average catches up to it.
On the other hand, if the pair drops below the 110.00 level, it will aim at the technical support provided by the 50.00% Fibonacci retracement level at 109.60.
Hourly Chart
On the daily candle chart, the USD/JPY has dropped down to the 100-day SMA, which it pierced during the decline.Meanwhile, the 55 and 200-day simple moving averages were located above and provided resistance. Namely, the SMAs were located at 111.35 and 111.48.
Daily chart
On Tuesday, on the Swiss Foreign Exchange, 56% of the total open position volume was in short positions.
By the middle of Wednesday's trading the sentiment was neutral, as 50% of volume was in long positions and 50% was in short positions.
The short traders have taken profits.
Meanwhile, trader set up pending orders were bearish, as 60% of pending commands in the 100-pip range were set to sell.
Namely, traders were ready to reopen short positions under certain criteria. Most likely the criteria is the passing of the support of the 110.00 level.