- The Swiss traders are 69% bullish on the USD/JPY
- Trader pending orders in the 100-pip range are 60% to sell the pair
- The rate has recovered after a drop
The USD/JPY is trading sideways and about to be squeezed in on the hourly candle stick chart. Namely, the 55 and 100- hour SMA lead the pressure. Most likely it will be squeezed in near the 108.40 level.
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."
All attention this week on Canadian rate hike
There are notable macroeconomic and monetary events taking place this week that are scheduled to be covered by Dukascopy and are expected to cause fluctuations in the Forex market.First up on Tuesday the Canadian Trade Balance will be published at 13:30 GMT. The event is expected to cause a bounce from 10 to 35 base points.
Afterwards, Wednesday will be the busiest day of the week for macroeconomics. At 15:00 GMT the Bank of Canada will publish its Overnight Rate. The bank is set to hike their interest rate from 1.75% to 2.00%. Due to that reason the USD/CAD is expected to fall at least 50 base points.
Afterwards, take into account that the big once per week move on oil due to US Crude Oil Inventories is scheduled to occur at 15:30 GMT. During the past month oil prices bounced from 40 to 80 cents per barrel on the announcement.
The busy day will end with the FOMC Meeting Minutes publication at 19:00 GMT. During the event the market usually does not fluctuate. However, surprises are possible.
Last but not least will be the releases on Friday. UK GDP and Manufacturing Production are expected to cause a 20 pip move at 09:30 GMT. At 13:30 GMT the US CPI and Core CPI data sets might cause a 10-30 pip move.
USD/JPY short term daily review
During the previous trading session on Friday, the US Dollar returned to trade at the previously drawn pattern. On Monday morning, the rate was trading between the 100-hour and the 55-hour simple moving averages at the 108.22 mark.The resistance levels of the 100-hour simple moving average and the 38.20% Fibonacci retracement level should push the US Dollar to depreciate against the Japanese Yen to trade below the weekly pivot point at the 107.50 level.
On the other hand, the US Dollar could appreciate against the Japanese Yen during today's US ISM Non-Manufacturing PMI data release at 15:00 GMT to break the resistance levels to reach the 108.50 level during the 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.
In addition, on Monday, the rate was located above a strong support level on the daily chart. The pair had no long term resistance as high as the 111.00 level.
Daily chart
Traders of the Swiss Foreign Exchange are mostly long on the USD/JPY. Namely, 68% of trader open positions were long by the middle of Monday's trading session.
It can be explained by the fact that after the sharp decline, which has occurred since 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 68% of cases.
Last week the orders were 59% set to buy. As the decline has extended, take profits and stop losses have been set closer.