- SWFX market sentiment is 59% bearish (-1%)
- 57% of pending orders in the 100-pip range are to BUY
- Significant resistance is located at 114.20
- Upcoming events: US Core Durable Goods Orders m/m, US Durable Goods Orders m/m, US New Home Sales, Japan's SPPI y/y
The Dollar was dragged slightly against the Japanese Yen after the disappointing PMI reports for the US. The USD/JPY dropped 13 base points to the 113.79 mark, but remained at the relatively strong level recovered after the decline triggered by the Japan's PM Shinzo Abe election victory.
The preliminary PMI report for the US services and manufacturing sectors showed better-than-expected readings of 55.9 and 54.5, respectively. The expansion indicators bolstered optimism over the US economy, though the bullish release failed to encourage the Greenback. Preliminary data was likely to confirm projections for the Federal Reserve to announce the interest rate hike at the December meeting.
Important data to be released today
The United States is to start this trading session with its Core Durable Goods Orders and Durable Goods Orders for September at 1230GMT, as well as the number of New Home Sales at 1400GMT. Meanwhile, the Bank of Japan will publish its Services Product Price Index at 2350GMT.
USD/JPY fluctuates in ascending triangle
A number of failed attempts to break through the 114.00 resistance level as well as inability of the rate to slip below the rising 55- and 100-hour SMAs confirmed an assumption that the pair is fluctuating in an ascending triangle pattern.A release of information on the US Core Durable Goods Orders later this day provides a good opportunity to make a breakout from it. At the moment, the northern side looks more reliably secured due to additional barrier set up by the weekly R1 at 113.19.
The southern side, in contrast, is protected only by moving averages, which are located quite far away from each other. In addition to that, there is a need to take into account that the average market sentiment is 61% bearish.
Hourly chart
USD/JPY managed to recover all of its Monday's losses yesterday, thus returning close to the psychological level of 114.00. The trading range still remains between the weekly R1 and PP at 114.19 and 112.92, respectively. Technical indicators demonstrate that the rate could still appreciate slightly; however, bears should be the dominant force during this week.
Daily chart`
SWFX market sentiment remains bearish on Wednesday, as 58% of traders are holding short positions (-1%). In addition, 51% of pending orders is to sell the US Dollar (-2%).
Traders at OANDA are increasingly bearish on the pair, as 56% of open positions are short (+2%). In addition, the number of open positions by Saxo Bank clients is at equilibrium (-1%).