Since early Monday's trading hours, the USD/JPY has been testing the resistance zone of the March high levels.
However, the rate has been booking higher low levels after each failed attempt to pass the zone. In addition, the support of the 55-hour simple moving average was approaching the rate from below.
Economic Calendar
On Tuesday, at 12:30 GMT expect the US Retail Sales and Core Retail Sales data. This publication could cause a move on the USD/JPY from 5.3 to 16.7 base points, as it has done since October 16, 2020.
On Wednesday, the US Federal Reserve is set to publish a FOMC Statement at 18:00 GMT and announce the Federal Funds Rate. This event is bound to set the tone for the whole global monetary policy. The USD/JPY has moved from 7.8 to 26.6 base points since November 5, 2020 on the announcement.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term daily review
In the case of the resistance zone failing, the pair would immediately face the resistance of the weekly R1 simple pivot point at 109.44. In the case of this pivot point not providing resistance, the rate could reach for the 2020 June high at 109.83 and the weekly R2 pivot point at 109.80.On the other hand, if the zone holds, the pair could have to pass the support of the 55-hour SMA before retracing back down to the weekly simple pivot point and the 100-hour simple moving average near 108.85.
Hourly Chart
On the daily candle chart, the rate could eventually reach the 61.80% Fibonacci retracement level at the 109.83 level. This retracement level stopped the rate's early June's sharp recovery and forced the USD/JPY into continuing its large scale decline.
Daily chart
Since Thursday, traders were 73% short on USD/JPY. On Tuesday, the sentiment changed to 71% short.
The Swiss Foreign Exchange open positions have been mostly short for more than two weeks. It appears that traders expect a larger retracement back down.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 54% to sell.