If the given support holds, it is likely, that bulls could prevail in the market within the following trading session.
Economic calendar
This week, the US FOMC Meeting Minutes are set to be published at 18:00 GMT on Wednesday.
This publication has caused adjustments of the USD/JPY charts since January from 7.7 to 19.4 base points.
USD/JPY short-term daily review
During the previous trading session, the USD/JPY currency pair tried to surpass the resistance level formed by the monthly S2 at 106.54. During Tuesday morning, the pair was testing the support of the 55– and 100-hour SMAs located circa 106.30.If the given support holds, it is likely, that bulls could prevail in the market within the following trading session. A possible upside target is the Fibonacci 23.60% retracement at the 107.02 mark.
However, if the given support does not hold. The exchange rate could go downwards. Note, that the rat could gain support by the weekly PP, the 200-hour SMA and the monthly S3 in the 105.87/106.14 range.
Hourly Chart
On the daily candle chart, it can be observed that the surge of the currency exchange rate was stopped by a 23.60% Fibonacci retracement level at the 106.98 level.
Moreover, it appears that the large scale descending channel last week was only pierced and not broken. Thus, from a theoretical point of view, it is likely, that the rate could go upside in the nearest future.
Daily chart
Read More: Technical Analysis
Traders remain long
On Tuesday, 73% of USD/JPY open position volume on the Swiss Foreign Exchange was in long positions.
Meanwhile, trader set up orders were slightly bearish. Namely, in the 100-pip range 55% of pending orders were set to sell and 45% were to buy.