By the middle of the day, the retracement downwards had dropped below a weekly pivot point and had no technical support as low as 108.70.
US ISM Manufacturing PMI at 14:00 GMT
On Thursday, the ISM Manufacturing PMI will be published at 14:00 GMT. This event has caused moves from 14.9 to 24.3 base points.
On Friday, the US employment data will be published. It will consist of the US Average Hourly Earnings, Non-Farm Employment Change and the official Unemployment Rate. This release has caused moves from 13.4 to 38.9 base points.
USD/JPY short-term daily review
On Thursday morning, the USD/JPY dropped below the weekly pivot point that is located at 109.12. Meanwhile, the rate had no technical support as low as 108.70. At that level the 55 and 100-hour simple moving averages were located at.Due to that reason a drop down was expected. The rate most likely would gradually decline down and meet the simple moving averages near the 108.80 level, as the SMAs should move upwards.
In the meantime, the 109.00 level is bound to provide psychological support. That is assumed because that level provided resistance during the first rate's attempt to surge on Wednesday. Namely, it revealed its significance.
Hourly Chart
On the daily candle chart, the rate has hit a previously set target. The resistance of the two large scale patterns.
In the future, in accordance with the patterns the currency exchange rate is expected to decline. The next target is the technical support cluster that is located at the 108.40 level.
Daily chart
Read More: Technical Analysis
Traders take profit
On Wednesday, 69% of total open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
That number declined to 60% on Thursday. Dukascopy traders had taken profit from the surge.
Meanwhile, trader set up pending orders were neutral, as in the 100-pip range 52% of pending orders were set to sell and 48% were to buy.