- SWFX market sentiment is 69% bullish
- 51% of pending orders in a 100-pip range to buy
- 54% of traders are bearish on the Yen
- Upcoming Events: US Unemployment Claims, Existing Home Sales, Mortgage Delinquencies
After a 22-pip depreciation the buck continued to lose value against the Japanese Yen until the pair slipped back to the monthly S1 at 108.82 Today the buck is expected to restore some of the lost positions. However, this recovery to great extent will be based on anxiety surrounding opening of the Jackson Hole Symposium.
The report showing an unexpected drop in the US new home sales in July boosted an initial fall in the USD/JPY. The Yen strengthened against the US dollar by 0.08% to reach the 109.39 mark, albeit the pair returned to testing pre-data levels in the Thursday's morning session.
The Commerce Department revealed that new home sales in the US fell 9.4% to a seasonally adjusted amount of 571K units in July, which was the strongest decline since December 2016. Weak figures raised concerns over the future recovery and healthy growth of the country's property market.
Data would be closely watched to evaluate whether enhanced supply conditions would help reinforce sales conditions in the next couple of months.
Another US housing data
In the middle of the day traders can watch a number of data releases coming from the United Stated. The first one relates to the weekly employment data, which usually does not cause any volatility in the markets.
Afterwards, there will be a release of the Existing Home Sales together with the Mortgage Delinquencies, which although provide crucial information about the American housing market, but also do not arouse high interest among market participants.
Finally, today will be the first day of the Jackson Hole Symposium, which brings together many authoritative persons from the world of finance. Hence, this is the event that traders should watch closely.
USD/JPY returns back to 108.82
Unfortunately for the buck, the assumption about an existence of a short-term ascending channel did not confirm, as the currency rate once again slipped to the monthly S1.A quite sharp fall indicated that the pair had a chance bypass this support level, but in the early Thursday morning the Greenback started to actively recover ahead of the Jackson Hole symposium. An aggregate of technical indicators suggests the pair will continue to move downwards despite the two failed attempts to slide below the 108.82 level.
That might be true, especially taking into account that the pair is simultaneously moving a senior descending channel. On the other hand, there will be also a release of the US housing data that might accelerate the fall, or help the buck to continue to recover further.
Hourly chart
On a daily chart it can be seen quite well that over the last four days the currency rate was moving relatively horizontally, making equal attempts to break to the top and sneak to the bottom. It seems that this uncertainty will last until the end of this week.
On the other hand, a release of information on the US Core Durable Goods today in conjunction with Janet Yellen speech at the Jackson Hole Symposium might give the buck a necessary impulse to choose one of the available directions.
Daily chart
SWFX market sentiment is bullish on Thursday, as the number of open positions is 69% long. Furthermore, 56% of pending orders are to buy the US Dollar, while 54% to sell the Yen.
OANDA clients are likewise bullish on the pair, as 68% of all open positions are long. Similar viewpoint is held by Saxo Bank clients with 65% long positions.