- SWFX market sentiment is 54% bullish
- 56% of pending orders in a 100-pip range are to sell
- Significant support is located at 109.93
- Upcoming events: US Core Retail Sales m/m, US Retail Sales m/m, Empire State Manufacturing Index, US Capacity Utilisation Rate, US Industrial Production m/m, US Preliminary UoM Consumer Sentiment
According to the Labour Department's report, the consumer inflation in the US showed a monthly rise of 0.4% in the month of August, with an annual gain of 1.7% in the same period.
An increase in the CPI figures boosted expectations for the Fed rate hike in December, which supported bullish sentiment in EUR/USD additionally fuelled by the NK latest missile launch. The next direction of the pair will be determined by Friday's US retail sales data.
US data releases
The most significant data sets scheduled for this session come from the United States. The day will start with (Core) Retail Sales for the month of August at 1230GMT. The Federal Reserve Bank of New York is to publish the Empire State Manufacturing Index at the same time. Meanwhile, some additional data of mediate importance, namely the Capacity Utilization Rate, the Industrial Production for August and preliminary Consumer Sentiment by the University of Michigan, is released at 1315GMT and 1400GMT.
USD/JPY fails to break above 111.00
As it was forecasted, in the middle of the day the currency pair indeed tried to soar to the weekly S2, which is located at the 110.98 level, but failed. Accordingly, the rest of the day the rate spent in a red zone. Fortunately for the buck, a combined support formed by the 100-hour SMA and the monthly PP at 109.76 forced the pair to make a turn around. For this reason, the first half of this trading day the currency rate is expected to spend in an upward movement with a preliminary target located near the 110.80 mark. The further movement of the pair will depend on release of information on the US Core Retail Sales as well as on remarks that will be made after the latest ballistic missile test made by North Korea.Hourly chart
The rate continues to move towards the upper boundary of a falling wedge. Currently, it faces a strong resistance - formed by the 55- and 100-day SMAs, the weekly R2 and the monthly R1 in the 110.80/111.30 area – that could halt any intentions to edge hair. Meanwhile, the downside is supported by the monthly PP at 109.77.
Daily chart
Bullish market sentiment has deteriorated on Friday, as 54% of traders are holding open positions (-5%). Meanwhile, 57% of current pending orders are to sell the US Dollar.
OANDA traders have not changed their sentiment since Thursday, with 54% of its clients holding long positions. In addition, Saxo Bank clients have 52% long positions (-2%).