- The Swiss traders are 62% bullish on the USD/JPY
- Trader pending orders in the 100-pip range are 59% to buy the pair
- The rate remains in a descending pattern
The biggest surprise about the USD/JPY is that the descending pattern used as a guide before the holiday season was still actively guiding the pair. However, it does not reveal, what will happen with the currency rate in the near future.
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 key highlight from the official statement, "Fed raises target interest rate to 2.25-2.50 pct, reduces expected hikes for 2019 to two from three."
US and Canadian Employment on Friday
The first week of the year will have a notable data release occurring. Namely, on Friday at 13:30 GMT the Canadian and US statisticians are expected to publish their employment data.In both countries the Average Earnings, Change in Employment in real numbers and the official Unemployment Rate will be published. This data release has caused an increase of volatility on the USD/CAD from 30 to 70 base points.
The data release will be covered during a live stream on the Dukascopy Webinars YouTube channel. The event will start at 13:20 GMT.
USD/JPY short term daily review
Dukascopy Analytics were surprised to find out that the previously drawn descending pattern, which was in focus of the daily reviews before Christmas, was still holding at the start of January.In general, the pair had reached the lower trend line of the pattern and bounced off of it on Wednesday. Due to that reason it was expected that the rate should surge. First target for a surge would be the weekly S2 at the 109.18 level.
On the other hand, a decline could be resumed, as the pattern is steep enough for its lower trend line to be below the 108.50 level before the middle of Thursday's trading session.
Hourly Chart
Note that on the daily chart the currency exchange rate is far below all of the daily simple moving averages, which are used for technical analysis by Dukascopy Analysis.The fact is signalling that the currency pair has to retrace back upwards after the recent sharp decline, which happened in December.
Daily chart
Traders of the Swiss Foreign Exchange are mostly long on the USD/JPY. Namely, 62% of trader open positions were long by the middle of Wednesday's trading session.
It can be explained by the fact that after the sharp decline, which has occurred throughout December, the retail traders are expecting a retracement back upwards.
Meanwhile, trader set up pending orders, stop losses, take profits and position open orders in the 100-pip range were set to buy the USD/JPY in 59% of cases.
The orders indicate that additional buying might be done by the retail trader sector.