In general, the decline could reach down to the 100-hour simple moving average, which on Friday was providing support at 106.35.
Economic Calendar
This week, the US FOMC Meeting Minutes are set to be published at 18:00 GMT on Wednesday.
This publication has caused adjustments of the USD/JPY charts since January from 7.7 to 19.4 base points.
USD/JPY short-term daily review
During the previous trading session, the USD/JPY currency pair tested the support of the 100-hour SMA. During Wednesday morning, the pair was trying to surpass the resistance level—the monthly S2 at 106.54.If the given resistance level holds, it is likely, that the exchange rate could reverse south in the nearest future. However, it is unlikely, that the rate could drop lower than the weekly PP at 106.14.
Otherwise, the Japanese Yen, supported by the 55-hour SMA at 106.46, could appreciate against the US Dollar in the short term. In this case, the rate could target the psychological level at 106.80.
Hourly Chart
On the daily candle chart, the rate is trading in the borders of a large scale descending channel pattern.
Meanwhile, the daily simple moving averages were located far above the currency exchange rate. It is an indicator of the pair being oversold.
Daily chart
Read More: Technical Analysis
Traders remain long
Since Tuesday, 73% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were neutral. Namely, in the 100-pip range 49% of pending orders were set to sell and 51% were to buy.