If the given resistance holds, it is likely that bears could prevail in the market.
Economic Calendar
This week will end with the US Retail Sales data release at 12:30 GMT on Friday, September 13.
Next week there will be only a couple of events that could affect the USD/JPY pair.
On Wednesday, September 18, the FOMC Statement and Economic Projections releases are expected at 18:00 GMT. Note that the Federal Funds Rate data will be published at the same time. Since December, these releases have moved the pair from 25.8 to 52.1 pips.
On Thursday, September 19, the Bank of Japan is expected to release the Monetary Policy Statement.
USD/JPY short-term daily review
Yesterday, the USD/JPY currency pair tried to surpass the resistance level formed by the weekly R2 at 108.13. During Friday morning, the pair was trading near the given resistance.Note that the exchange rate is supported by the 55– and 100-hour SMAs, currently located at 107.93 and 107.64 respectively. Thus, some upside potential could prevail in the market. A possible upside target is the Fibo 38.20% at 108.44.
However, if the given resistance level holds, a reversal south could occur in the nearest future. In this case it is unlikely that the rate could drop lower than the 107.52 mark due to the support level formed by the weekly R1.
Hourly Chart
On the daily candle chart, the pair is heading to the resistance of a dominant channel down pattern, which should be met at 108.00.
Due to that fact the daily candle chart should be mainly focused on.
Daily chart
Read More: Technical Analysis
Traders remain long on USD/JPY
On Friday, 54% of open USD/JPY position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were slightly bearish. Namely, in the 100-pip range 56% of pending orders were set to sell and 44% were to buy.