The USD/JPY has revealed a minor channel down pattern, which captures the rate's decline in the aftermath of the Wednesday's US CPI release surge.
Future scenarios were based upon whether or not the rate continues to trade in the pattern's borders.
Economic Calendar
Next week, the rate could move due to the FOMC Meeting Minutes on Wednesday at 18:00 GMT. The pair has moved from 3.8 to 7.9 pips on the release.
Click on the link below to find out more about the data releases of this and other currency exchange rates.
USD/JPY short-term review
In the case of the channel down pattern holding, the rate would gradually decline to the support of the 100 and 200-hour simple moving averages somewhere near 109.30. If these levels fail to hold, the pair could reach the 109.00 level.On the other hand, a failure of the pattern could result in immediate drop to the mentioned simple moving averages and afterwards the 109.00 level.
Hourly Chart
USD/JPY daily chart's review
On the daily candle chart, despite being pierced for three days, it appears that the 55-day simple moving average has provided some support to the recent surge.In addition, note the Fibonacci retracement levels. Namely, the 50.00% Fibonacci retracement at 108.57 and the 61.80% Fibo at 110.05.
Daily chart
On Friday, traders on the Swiss Foreign Exchange were 65% short on USD/JPY.
During Thursday's trading, 68% of volume was short.
Meanwhile, on Friday, trader set up pending orders in the 100-pip range around the rate were 56% to sell the pair.