As most pairs on Monday, the USD/JPY had jumped. The event occurred due to the US and China resuming trade talks.
The event both caused a surge of the USD and a general drop of the JPY. Namely, value went into risk on assets and currencies through the USD from the JPY.
Bureau of Economic Analysis released the US Final GDP data, which came out in line with expectations of 3.1%.
According to the official release: "The first-quarter percent change in real GDP was the same as previously estimated, reflecting upward revisions to non-residential fixed investment, exports, state and local government spending, and residential fixed investment that were offset by downward revisions to PCE and inventory investment, and an upward revision to imports."
US Employment and ISM PMIs
On Monday, the markets will look at the ISM Manufacturing PMI data at 14:00 GMT. This event has caused moves on the USD/JPY since February from 14.9 to 29.7 pips.
On Wednesday, the ISM Non-Manufacturing PMI will be published at 14:00 GMT. The data release has caused moves from 8.5 to 20.9 pips on the charts.
For this pair the week will end with the US Employment data sets – the Average Earnings, Unemployment Rate and Non-Farm Employment Change.
On the USD/JPY charts this event has caused moves in a range from 13.4 to 38.9 pips since February.
USD/JPY short-term daily review
At the end of previous week, the JPY/USD currency pair skyrocketed to the resistance level formed by the weekly PP and the Fibonacci 38.20% retracement at 108.44. During today's morning, the pair was testing the given resistance.Note, that the exchange rate was trading near the upper boundary of the medium-term descending channel, thus, it is likely, that some downside potential could prevail in the market.
However, it is unlikely, that the exchange rate could drop lower than 107.63/107.91 range due to the support cluster formed by the 55-, 100– and 200-hour SMAs, as well the weekly and monthly PPs.
On the other hand, the rate could trade sideways in the short run, trying to surpass the given resistance.
Hourly Chart
On the daily candle chart, the rate was testing the upper trend line of a long term descending channel pattern. Namely, the pattern that has guided the rate since May was being tested.
Due to the recent move being fundamental, it is likely that the pattern will be broken, if additional trade talk announcements are made.
Daily chart
On Friday, 74% of all open position volume was in long positions. By the middle of Monday's trading session, on the Swiss Foreign Exchange 72% of trader open USD/JPY position volume was in long positions.
Meanwhile, trader set up pending orders were neutral, as 50% of pending commands in the 100-pip range were set to buy and sell. Previously, 59% of orders were to buy in that range.