The USD/JPY did not need the support of the 50.00% Fibonacci retracement level at 108.35 to recover. The rate found support just above the 108.40 mark and surged to the 55-hour simple moving average, which provided resistance.
By the middle of Wednesday's trading, the rate was making another attempt to pass the 55-hour SMA.
Economic Calendar
On Wednesday, at 13:45 GMT the US Services and Manufacturing PMIS could cause moves from 3.0 to 28.6 pips. However, note that the 28.6 pip move in November was an anomaly. Without it, the range is 3.0 to 7.6 pips.
On Thursday, the US Final GDP is set to be released at 12:30 GMT. The event has caused moves from 4.5 to 38.9 pips since December 2019. Although, without the March 2020 move of 38.9 pips, the range is insignificant. Namely, 4.5 to 8.5 pips.
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USD/JPY short-term daily review
If the 55-hour simple moving average fails to provide resistance, the pair would most likely look for resistance in the 100-hour simple moving average near 108.80. In the case of the 100-hour SMA, the rate could aim at the resistance cluster that is located from 108.90 to 109.00.On the other hand, the 55-hour SMA could hold and push the rate into a test of the previous low levels above the 108.40 level and afterwards the 50.00% Fibonacci retracement level at 108.35.
Hourly Chart
On the daily candle chart, the rate recently bounced off the upper trend line of a large scale channel up pattern. The pattern was added to the chart on Monday.
Daily chart
On Tuesday, traders were 75% short on USD/JPY. On Wednesday, the sentiment was 71% short.
The Swiss Foreign Exchange open positions have been mostly short for more than three 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 64% to buy. Previously, 71% of orders were to buy.