On Thursday, the USD/JPY traded with the same high volatility. However, it had declined down and booked a new low level during the second part of the day's trading.
In general, if the rate drops below and breaks off from the simple moving averages just above the 110.60 mark, it could fall as low as 110.46.
The Federal Reserve released the US FOMC Meeting Minutes on Wednesday. The Fed officials provided in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates.
"Almost all participants thought that it would be desirable to announce before too long a plan to stop reducing the Federal Reserve's asset holdings later this year. Such an announcement would provide more certainty about the process for completing the normalization of the size of the Federal Reserve's balance sheet," the document said.
Canadian data on Friday
The week will end with the Canadian Core Retail Sales at 13:30 GMT on Friday.The event is scheduled to be covered by Dukascopy Analytics on our Dukascopy Webinars YouTube channel. The stream starts ten minutes before the data release.
For more information watch the weekly Calendar Analysis stream recording.
USD/JPY short term daily review
By the middle of Thursday's trading session the USD/JPY had pierced the support of the 100 and 200-hour simple moving averages. The near term future depends on these levels.If the rate clearly passes the support of the 100 and 200-hour SMAs and begins to move lower, the rate will aim at the support of the weekly PP at 110.46.
On the other hand, the current level might be held and the rate would approach the 61.80% Fibonacci retracement level at 110.77.
Hourly Chart
On the daily chart, the long term target of the 111.00 has been reached. Namely, the pair reached above it and retraced back down to the 55-day SMA.In general, by looking at the daily chart it can be observed that the pair is expected to trade sideways, as it has ended an upwards aimed wave.
In addition, an ascending pattern has been added to the chart and is being used to show the surge of the USD/JPY of 2019.
Daily chart
By the middle of Thursday's trading session 57% of the total open position volume on the Swiss Foreign Exchange was short.
Meanwhile, in the 100-pip range around the pair trader set up pending orders were set to sell the pair in 51% of cases.
Traders are still short on the pair despite the recent volatility. Meanwhile, the pending orders have become neutral.
It indicates that no additional short positions would be massively opened and that the current open short positions have no close by take profits and stop losses.