USD/JPY increased volatility due to Fed

Note: This section contains information in English only.
Source: Dukascopy Bank SA
The initial announcement of the US Federal Reserve rate hike caused a decline of the USD/JPY to the late October low level zone at 145.13/145.67, which acted as support. Afterwards, explanations about policy that were given by the head of the US Federal Reserve Jerome Powell, caused a surge of the pair.

Economic Calendar



On Thursday, the Bank of England is scheduled to also hike its interest rate at 12:00 GMT. The central bank is bound to react to and comment on recent political events in the United Kingdom.

On the same day at 14:00 GMT, the US ISM Services PMI is expected to impact the value of the US Dollar.

On Friday, more important data will be published. At 12:30 GMT, the US Unemployment Rate, Non-Farm Employment Change and Average Hourly Earnings are expected to cause US Dollar's moves.

Hourly Chart
An extension of the surge might find resistance in the Monday's high level zone at 148.75/148.85. A move above the resistance zone could be slowed down by the 149.00 and 149.50 levels, before reaching the 150.00 mark.

On the other hand, a decline could look for support in the combination of the 50, 100 and 200-hour simple moving averages near 147.50. Further below, the 145.13/145.67 zone is expected to once again act as support.

USD/JPY daily chart's review

On the daily candle chart, the September high level zone appears to be acting as support. In the meantime, note that the zone has been reached by the 50-day simple moving average.

Daily chart




Traders are neutral

Prior to the US event week, on the Swiss Foreign Exchange, traders were 66% short as that amount of open position volume was in short positions.

Meanwhile, trader set up pending orders in the 100-pip range around the rate were 59% to buy the USD against the JPY.

After the US rate hike, traders were 50% bullish and bearish. Namely, the sentiment was neutral. In the meantime, pending orders were 59% to sell.

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