- The Swiss traders are 62% bearish on the USD/JPY
- Trader pending orders in the 100-pip range are set to buy in 55% of cases
- Twenty to thirty pip reaction is expected on the USD/JPY charts at 13:30 GMT
The USD/JPY has pierced the support line of a dominant ascending pattern, signalling that the USD/JPY is set to decline in the near future. Namely, a large scale head and shoulders pattern might be indicating a change in the long term direction of the currency pair.
Latest Fundamental Event
The Federal Reserve releases US FOMC Meeting Minutes where fed officials provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
The minutes said, "Almost all participants expressed the view that another increase in the target range for the federal funds rate was likely to be warranted fairly soon".
US Employment data sets at 13:30 GMT
Last but not least this week will be the Friday's monthly US and Canadian employment data release at 13:30 GMT. This event will be covered by Dukascopy Analytics.For this pair during the last half a year the data release has caused a move from 20 to 30 base points. If your stop loss is closer than that, it is most likely going to get triggered.
USD/JPY short term daily review
The USD/JPY has pierced the lower trend line of the dominant ascending channel pattern. It is signalling that a head and shoulders pattern exists on the charts. In general, the breaking of the support level indicates that the decline of the USD/JPY should continue.On Friday morning the currency exchange rate was squeezed in between a Fibonacci retracement level at 112.70 and a pivot point at 112.90. It was most likely expected that the 55 and 100-hour simple moving averages will approach the rate from the upside and push it down through the Fibo retracement.
On the other hand, the Fibo might hold due to the strength of the already pierced trend line. The reason for this assumption is that the rate had been still influenced by the trend line of the pattern after it returned to the borders of the broken pattern.
Hourly Chart
On the daily chart it can be observed that the currency exchange rate's decline was stopped by the support of the 100-day simple moving average at the 112.20 level.
Meanwhile, note that the 55-day simple moving average at 113.00 was providing resistance to the USD/JPY.
Daily chart
By the middle of the day's trading 62% of open positions were short on USD/JPY on the Swiss Foreign Exchange. The sentiment had not largely changed through the week.
Meanwhile, trader set up pending orders, stop losses, take profits and position open orders were neutral since Wednesday. On Friday, the situation changed, as in the 100-pip range 55% of trader pending orders were set to buy the USD/JPY.
In general, traders remain short. Although, the presence of buy orders indicates that the retail traders of the Swiss Foreign Exchange might soon take profit in case of the pair reaching their set targets or a retracement upwards.