On Monday, the decline of the USD/JPY currency pair reached below the support of the 113.00 mark, which was strengthened by the weekly S1 simple pivot point.
On Tuesday, the rate retraced back up and confirmed the 113.00 level as a resistance. Namely, the pair moved back up and bounced off the 113.00 mark.
Economic Calendar
On Tuesday, the US Producer Price Index and Core Producer Price Index at 13:30 GMT could cause minor USD volatility. The USD/JPY has moved from 9.4 to 13.1 on the release.
On Wednesday, at 13:30 GMT, the US Consumer Price Index and Core Consumer Price Index will be released. In addition, the weekly US Unemployment Claims are set to be out at the same time. If the data sets combined beat or disappoint forecasts, a notable move in all USD assets might occur.
The CPI has caused moves from 19.1 to 30.4 pips since June. Meanwhile, the Unemployment Claims have created moves from 5.9 to 12.2 base points.
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
If the rate continues to decline, the next target for the decline could be the weekly S2 simple pivot point at 112.58. Below the pivot point, the 112.50 mark might provide support, before the USD/JPY reaches the September high level zone at 112.05/112.10.However, a recovery of the pair above the 113.00 mark might find resistance in the 50-hour simple moving average at 113.30. Above the 50-hour SMA, the 100-hour SMA at 113.60 could serve as resistance. In addition, the 200-hour SMA and the weekly simple pivot point at 113.72 are likely set to also provide downwards pressure.
Hourly Chart
USD/JPY daily chart's review
The rate has passed the 113.50 level, which provided support since October 20.The 114.40/114.75 zone is the resistance zone of the late 2017 and 2018 high levels.
Meanwhile, note the support zone below the 112.50 level. The zone consists of the 2019 and 2020 high levels.
Daily chart
On Tuesday, on the Swiss Foreign Exchange, traders were short, as 73% of open position volume was in short positions.
On Monday, sentiment was 71% short.
Meanwhile, on Monday, trader set up pending orders in the 100-pip range around the rate were 53% to buy.
On Tuesday, the orders were balanced, as 50% were to buy and 50% to sell.