Two large fundamental events have taken place that have beat the USD/JPY down to 107.50.
The US Federal Reserve signalled that it will do a rate hike, which caused a drop of the USD.
The Bank of Japan announced that it is not changing its monetary policy crashing speculations that it will also ease policy and beat down the value of JPY.
Those are the two drops that one can observe on the USD/JPY chart. Full reports of both events will be published in the Fundamental Analysis section on our website on Thursday. Moreover, aftermath analysis videos will be available on the Dukascopy Webinars YouTube channel.
No more events this week
The events that impacted the USD/JPY this week have passed. Wait for Monday to see the Weekly Economic Calendar Analysis on the Dukascopy Webinars YouTube channel.
USD/JPY short-term daily review
During Wednesday, the USD/JPY currency pair dropped to the support level formed by the weekly S3 at the 107.58 mark. During today's morning, the pair reversed north.Note, that the exchange rate has to surpass the resistance level—the weekly S2 at 107.87 to maintain its decline. If the given resistance holds, it is expected, that the rate could trade sideways in the short run.
If the given resistance does not hold, it is likely, that the pair could surpass the psychological level at the 108.00 mark within the following trading hours.
Hourly Chart
On the daily candle chart, the drops were still in the borders of the long term descending channel pattern.
Moreover, the pair still has room for a decline, as the lower trend line of the pattern on Thursday was located just above the 106.50 level.
Daily chart
Since Monday, 72% of open position volume on the Swiss Exchange Market were long.
By the middle of Thursday's trading session the sentiment had grown to 74%.
Despite the drop, traders have stuck to being long on the pair. Moreover, some are long in the expectations of a retracement upwards.
Meanwhile, trader set up pending orders were mostly bearish, as 62% of pending commands in the 100-pip range were set to sell. Previously, 73% of orders were to sell.