During Tuesday's European trading hours, the USD/JPY once again tested the resistance of the 106.20 level. The attempt was caused by a surge, which started from the 55-hour simple moving average.
In the near term future, it was forecast that the SMA could push the rate through the 106.20 level.
Economic Calendar
On Tuesday, the US Core PPI and PPI data are going to be released at 12:30 GMT.
On Wednesday, the US Core CPI and CPI data will be released at 12:30 GMT.
On Thursday, the US Unemployment Claims data might affect the market. The release is scheduled to 12:30 GMT.
The week will end with the US Retail Sales data release on Friday at 12:30 GMT.
Click on the link below to find out more about the data releases.
USD/JPY short-term daily review
On Monday, the USD/JPY currency pair surpassed the monthly PP at 106.09. During today's morning, the pair was trading near the given level.It is likely that now the monthly PP could provide support to the exchange rate. Thus, it is likely that some upside potential could prevail in the market, and the rate could target the weekly R1 at 106.51.
In the meantime, it is unlikely that some downside potential could prevail in the market as the currency pair could gain support from the 55-, 100– and 200-hour SMAs in the 105.60/105.90 area.
Hourly Chart
On the daily candle chart, the rate continues to trade downwards, guided by the descending channel. In the near term future, the upper trend line of the pattern is set to be tested.
Daily chart
On Tuesday, on the Swiss Foreign Exchange 66% of open position volume was in long positions.
During Monday's GMT trading hours, the sentiment was 62% long.
Meanwhile, trader set up pending orders in the 100-pip range were 75% to sell. Previously, the orders were 68% to sell.
It can be assumed that traders have been opening long positions and closing shorts.
In the meantime, the sell orders to close long positions and open shorts are close by, as a reversal is expected.