- SWFX market sentiment is 58% bearish
- 55% of pending orders in the 100-pip range are to SELL
- Whole day is filled with webinars
The surge of the US Dollar against the Japanese Yen is continuing. The surge is also occurring faster than it was initially expected.Due to that reason after the recent gains it is expected that a period of consolidation or a short lived decline could take place.
The Census Bureau released the monthly Durable Goods Orders that came out lower-than-expected of 1.0% compare with forecasted 3.0%, but better than previous period.
"A senior investment manager Patrick O'Donnell, from Aberdeen Standard Investments, said: "It looks like the European side is trying to acquiesce to Trump's demands. They've got more to lose if tariffs look to be placed on autos, for example. So over multi-month horizon, we'll probably see lower tariffs globally".
A very busy day for macroeconomic data
On the calendar of Wednesday there are five notable data releases occurring for various currencies. However, in regards to the strength of the US Dollar and subsequently this financial instrument, there are three notable events set to occur.
First will be the ADP Non-Farm Employment Change, which will be released at 12:15 GMT. Second will be the ISM Manufacturing PMI at 14:00 GMT. Both data releases will be covered by Dukascopy Analytics on the bank's live webinar platform. The covers will start ten minutes before the data being released.
Those will be usual minor data releases. Meanwhile, today will occur a much larger and more notable event. The US Federal Reserve is set to announce its Federal Funds Rate and release a Statement. This event will also be covered. It will take place at 18:00 GMT.
In addition, if you are just looking for a quick trade of a release, today at 14:30 GMT the US Crude Oil inventories will be published. The data set has proved itself as one creating a 60 base point bounce almost each week.
USD/JPY shoots up on Tuesday
USD/JPY gained 83 pips on Tuesday after accelerating from the senior channel near 111.00. The Greenback strengthened against all major currencies mid-session, thus surging almost 0.40% against the Yen in one hour.By Wednesday morning, the rate had allayed considerably, but it was still able to reach the weekly R2 at 112.08. This solid appreciation has sent the pair in the overbought territory, while technical indicators are converging. Thus, the US Dollar is likely to aim for the 55-, 100– and 200-hour SMAs near 11.20. Given that this cluster is also reinforced by several other lines, this level should remain intact.
Conversely, upside target is set near the 113.00 mark. Despite trading sideways for several hours, bulls could still add some gains during the following hours.
Hourly Chart
The lower trend line of the dominant ascending channel pattern has continued to hold its ground, as the currency has continued to book higher low levels.
Previously, the currency exchange rate was set to face strong resistance levels each 50 base points. Namely, resistance at 111.50 mark. Afterwards a resistance at 112.00, and above that level next resistance will be near 112.50.
On Wednesday, the first level was already passed. Next target was the 112.00 mark, which managed to hold ground during the morning hours of the trading session.
Daily chart
SWFX traders are SHORT on the USD/JPY pair, as 58% of open positions were bearish during the morning hours. Meanwhile, Swiss trader set up orders remain almost neutral, as 51% of all set up orders are to sell the US Dollar in favour to the Japanese Yen.
Due to the fact that the open position bullish proportion has decreased by 4%, it can be assumed that some have already taken profit from the surge. Although, a dominant proportion of retail traders remain long.
Meanwhile, the market sentiments of OANDA traders are bullish on the USD/JPY pair as 57% of open positions are long.
However, Saxo bank traders are 53% bearish in regards to this exchange rate. Previously they were almost neutral.
Spreads (avg, pip) / Trading volume / Volatility