The recovery of the USD/JPY continued on Thursday, as the rate had reached the 109.00 level.
In the meantime, the future of the surge of the pair was unlikely, as the pair faced three resistance levels just above the 109.00 mark.
Since Monday, December 2, the US Dollar has been depreciating.
Most likely, the Greenback is pressured by various fundamental events. Firstly, on Monday, the World Trade Organization rejected the EU claims for providing subsidies to Airbus. Thus, the US could increase tariffs on more European goods.
Also, on Monday, Cuba took another step to end dual monetary system, and two department stores in Havana began to give change only in pesos.
Moreover, the US President Donald Trump announced tariffs on the US steel and aluminum imports from Brazil and Argentina. Trump claimed that the given countries control devaluation of their currencies, and it was harmful for the US farmers.
According to analysts, the Greenback was also pressured, as the US factory activity has been declining for four months. Also, the US construction spending dropped in October.
On Tuesday December 3, the EU representatives said that the union was ready to reciprocate in case the US would impose tariffs on the French products worth $2.4B.
All these events could negatively affect the demand for the US Dollar, as trade flows could decrease significantly.
Economic Calendar
Meanwhile, the week's scheduled event historical data tables have been published. Click on the link below to read the article.
USD/JPY short-term daily review
Given that the exchange rate is pressured by the 100– and 200-hour moving averages, it is likely that some downside potential could prevail in the market. In this case the rate could re-test the support level formed by the Fibo 38.20% and the monthly S1 at 108.40.On the other hand, the currency pair could gain support of the 55-hour moving average at 108.77 and extend gains within the following trading session. However, note that the pair could face resistance of the SMAs and pivot points from 109.03 to 109.29.
Hourly Chart
On the daily candle chart, the 38.20% Fibonacci retracement at the 108.43 level was strengthened by the 55-day simple moving average.
In the meantime, the 200-day SMA was pierced by the rate at the 108.90 level.
These factors indicate that the 55-day SMA could push the rate through the resistance of the 200-day SMA.
Daily chart
On Thursday 69% of open USD/JPY position volume on the Swiss Foreign Exchange was in short positions.
Meanwhile, trader set up pending orders were to sell. In the 100-pip range 62% of pending orders were to sell and 38% were to buy.
Previously, 61% of orders were to buy. The change indicates that traders do not intend to close their short positions.