After reaching a new low level on Tuesday morning London trading hours, the USD/JPY began to recover.
In general, the rate was expected to trade near the 108.00 level until it gets approached by technical resistance levels that push it down.
Bureau of Economic Analysis released the US Prelim GDP data, which came out in line with expectations of 3.1%.
According to the official release: "Today's estimate reflects downward revisions to non-residential fixed investment and private inventory investment and upward revisions to exports and personal consumption expenditures (PCE). Imports, which are a subtraction in the calculation of GDP, were revised up; the general picture of economic growth remains the same."
On Wednesday, a minor move might be caused by the ISM Non-Manufacturing PMI at 14:00 GMT.
The week will end with the Canadian and US employment data being published at 12:30 GMT. This event consists of five different data sets being released.
For more details watch the Economic Calendar Overview. Moreover, feel free to ask questions for details.
USD/JPY short-term daily review
USD/JPY continues to decline, as a new low level has been reached on Tuesday. Namely, the rate has fallen below 108.00.In general, because the rate slowed down the decline during the last two trading sessions, the hourly simple moving averages have caught up. It is a signal that the rate is not oversold, the pressure to retrace back up is not strong enough to push the pair up.
In addition, the pair has no technical support as low as 107.73. Due to the combination of these two factors a decline down to the 107.73 level is expected.
Meanwhile, the rate could continue trading around the 108.00 level until the 55-hour SMA approaches it from above and provides resistance.
Hourly Chart
On the daily candle chart, a descending channel pattern has been added. Its lower trend line is strengthening the support of the pivot point at 107.73.Daily chart
On Tuesday, the Swiss Foreign Exchange sentiment was 73% long. Namely, 73% of open USD/JPY position volume was in long positions.
Meanwhile, trader set up pending orders had become also long, as 57% of pending commands in the 100-pip range were set to buy.
In general, it appeared on Tuesday that despite the USD/JPY reaching new low levels traders were going long, as they expected a surge of the rate.