© Dukascopy Bank SA
During October 6-10 trading week, the USD/JPY currency cross performed in a strong bearish trend, as the pair lost around 260 pips in five working days and crossed a number of considerable support levels. This currency pair is usually driven by American statistical data; however, last week used to be an exception. On October 6, the pair developed in a calm manner, taking into account neutral news both from U.S. and Japan. However, starting from Tuesday the Japanese currency started gaining value against US Dollar on an increased pace. According to Thursday's data release, Japanese core machinery orders surged 4.7% in August, three times more than it was expected by economists. Along with that, US crude oil inventories went up significantly, while wholesale inventories increased and unemployment claims for the week ended October 3 remained almost unchanged. It influenced market sentiment at all USD-crosses. Therefore, from Monday's mark of 109.81 the USD/JPY currency pair slid down to 107.25, just above the weekly S2. Dukascopy traders, in turn, were undecided on pair's perspectives last week, as votes were equally divided between bulls and bears.
The present trading week experienced only some minor changes in market preferences, as now long votes take almost 53% from all, underlying a slight improvement in the sentiment for US Dollar. In general, we can interpret this distribution between bullish and bearish votes as neutral, as it is proved by the average market expectation for October 17. It is located around 107.40, in the range, where the majority of votes is focused as well. This week will be rich on US data, including building permits and manufacturing statistics from Federal Reserve Bank of Philadelphia on Friday, which can attract attention among market participants.
© Dukascopy Bank SA