During the last twenty four hours the USD/JPY traded sideways just below the 109.60 level.
On Tuesday morning, it bounced off the resistance level and began the previously expected decline.
The Federal Reserve released the FOMC Meeting Minutes data, where the US policymakers provide in-depth insights into the economic and financial conditions that influenced their vote on where to set interests rates.
The US policymakers showed that they were in no rush to change interest rates, despite the fact that the US economy remains to strengthen. Members of the Federal Open Market Committee voted on leaving the rates unchanged, as they continue to use "wait-and-see" approach.
On Wednesday, the markets will watch the Bank of Canada Rate Statement at 14:00 GMT. This event has caused since October 2018 moves from 67 to 93 base points on the USD/CAD.
It is currently the top creator of sudden volatility in the markets.
On Thursday, at 12:30 GMT the US Preliminary GDP will be published. This event, which is considered and shown on the calendars as a top mover, has not caused notable moves.
Since November 2017 this event has caused on the EUR/USD moves from 6.8 to 11.9 pips during the five minutes after the release. Note that a move below ten pips on the EUR/USD during five minutes happen often without any data being published.
The week will end with the Canadian GDP publication at 12:30 GMT. This event has caused moves from 21 to 64 pips since December.
USD/JPY short-term daily review
During the previous trading session, the USD/JPY currency pair tried to surpass the resistance level formed by the 55-hour SMA and the Fibonacci 50.00% retracement at 109.58.During Tuesday's morning, the pair reversed south. It is likely, that some downside potential could prevail in the market. However, note, that the exchange rate has to surpass the monthly S3 at the 109.12 mark.
If the given support level holds, it is expected, that a reversal north could occur within the following trading hours. Otherwise, the pair could decline to the psychological level at 109.00.
Hourly Chart
On the daily candle chart it can be seen that the 100-day simple moving average, which was touched, indicated that the rate is no longer oversold.Due to that reason, the upwards pressure was removed. It was one of the causes of the massive selling that occurred.
Daily chart
By the middle of Monday's London trading on the Swiss Foreign Exchange 56% of open position volume was in long positions.
On Tuesday, 59% of open position volume was in longs.
Meanwhile, trader set up pending orders were bearish, as 57% of pending commands in the 100-pip range were set to sell.