The surge of the USD/JPY has continued, as on Thursday morning the rate almost reached the 107.40 level.
However, a consolidation by trading sideways or declining was highly likely, as the USD had overextended its gains against the JPY.
Economic Calendar
On Wednesday, the US ADP Non-Farm Employment Change at 13:15 GMT will be on the headlines. However, the market does not care, as since December 2 the rate has moved only 3.9 to 13.3 pips on the release.
On the same day, at 15:00 GMT the US ISM Non-Manufacturing PMI could cause a move from 3.0 to 16.0 pips.
On Friday, at 13:30 GMT the US will publish its monthly employment data. The release will consist of the Average Hourly Earnings, Non-farm Employment Change and Unemployment Rate. The USD/JPY has moved from 10.4 to 25.9 pips on the publication since October.
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
Instead of reaching new high levels or trading sideways, the USD/JPY retraced back down to the support of the 55-hour simple moving average. On Wednesday, the SMA had pushed the rate back to the 106.90 level, which provided resistance on Tuesday.If the rate manages to pass the 106.90 mark, it could immediately find resistance in 107.00. In the case of the 107.00 level not providing resistance, the pair should reach for the weekly R1 simple pivot point at 107.25.
On the other hand, if the 106.90 level provides resistance, the rate would first look for support in the 55-hour SMA at 106.77 and afterwards the 100-hour SMA near 106.55.
Hourly Chart
On the daily candle chart, the rate has pierced the upper trend line of the channel up pattern, which captures the 2021 surge. Namely, the recent gains are larger and achieved faster than it was previously expected.
Daily chart
Since Wednesday, traders were 73% short on USD/JPY. The Swiss Foreign Exchange open positions have been mostly short since last Friday.
Meanwhile, trader set up pending orders in the 100-pip range around the rate were 73% to sell. The orders were 58% to sell on Wednesday.